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           P.J. Rolfe, Community Development Manager, Matamata-Piako District Council
                        M.E. Rademeyer, Resource Management Consultant
                H.F.X. Keane, Resource Programme Manager, Environment Waikato
                           A.M.B. Green, Partner, Brookfields Solicitors
                   J. Seddon, Environmental Engineer, Inghams Enterprises Ltd.

The Matamata-Piako district is predominantly a dairy farming region, but the rural area is also home to
lifestyle dwellers and a diversity of other activities such as intensive farms and agricultural processing.
Rural-based industries are of significance, both in terms of their contribution to employment and as a
driver for economic growth. Realising the potential for conflict between industry (such as intensive
farming) and those who live in rural areas, the District Council proposed a number of reverse
sensitivity provisions in its District Plan, as a method to manage divergent rural uses in an integrated
manner. The proposed provisions included reverse sensitivity buffers around intensive farms and
effluent treatment plants, and the use of Development Concept Plans to recognise existing
development and to regulate the future expansion of large rural-based processing. Buffers were also
proposed on some Development Concept Plans for major industry. The proposed rules were
challenged by both industry proponents, and farming/ resident groups. The case was recently heard
by the Environment Court and the resulting Interim Decision has provided guidance on the matter.
This is a joint presentation and panel discussion by some of the individuals who gave evidence or
made submissions at the Environment Court hearing. It draws on the preparatory work done to
present the case and seeks to promote discussion on the Court’s findings with specific reference to
litter poultry farming.

As at the date of writing, a final decision has not yet been released by the Environment Court in
respect of reverse sensitivity. As such, some of the issues raised at the hearing are yet to be finally
determined and the discussion of the relevant issues should not be taken as the opinion of the Council
or the parties to the hearing; the intention is to illustrate the vexed nature of the concept of reverse

The Matamata-Piako district is a fertile farming area located in the Waikato region, to the east of
Hamilton. Dairy production is, and always has been, the backbone of the district’s economy.
Increasingly, the rural area has become home to lifestyle dwellers and a diversity of other activities
such as agricultural processing, intensive farms, and extractive industries. Examples of these activities
    Two Fonterra Ltd dairy factories located at Waitoa and Morrinsville;
    Tatua Cooperative Dairy Company’s dairy plant in Tatuanui;
    Wallace Corporation’s meatworks near Waitoa;
    Richmond Ltd’s plant near Te Aroha;
    Winstone’s quarry in Harbottle Road;
    Meadow Mushroom’s composting farm and production facility near Morrinsville;
    The Inghams Enterprises (NZ) Pty Ltd poultry processing plant near Waitoa; and:
    Approximately 30 broiler chicken farms scattered throughout the District.

One of the major challenges facing planners at Matamata-Piako District Council and Waikato Regional
Council is the sustainable management and co-existence of these divergent rural uses. The location of
a new activity capable of emitting adverse effects can be managed by setting appropriate standards
and conditions, or to refuse consent where effects cannot be avoided, remedied, or mitigated.
However, this is not the case when sensitive activities seek to locate in close proximity to lawfully
established industries that generate adverse effects. It is in these instances where reverse sensitivity
can arise, that the management of the potential conflict between adjacent uses presents some
difficulty because nearby residents may react strongly to the effects of the lawfully established
activities by way of complaints or lobbying which can lead to pressure even on significant industries, to
curtail their operations or to relocate.

A method used by District Councils to assist in the management of this type of effect is the inclusion of
reverse sensitivity rules in District Plans. The Matamata-Piako Proposed District Plan adopted a
number of such provisions. However, the principle of reverse sensitivity buffers as a resource
management “tool” does not enjoy general acceptance. Some people argue it is unfair to place
restrictions on an adjoining owner’s land without some form of compensation. It is also suggested that
the solution is for “emitters” to internalise all adverse effects. The arguments relating to the concept of
reverse sensitivity, in the context of the Matamata-Piako District Plan were recently heard by the
Environment Court, and the Interim Decision of Judge C.J. Thompson dated 18 June 2004 (see
Winstone Aggregates and Ors v Matamata-Piako District Council (W0055/2004)) provides an
interesting view of the salient features that arise when the merits of proposed reverse sensitivity issues
are debated.

The findings of the Court, especially in relation to the reverse sensitivity provisions for litter poultry
farms (which the Court acknowledged caused “more difficulty and debate than any of the other
activities”) will be discussed in detail, in the rest of this Paper.

The Court identified certain principles relating to reverse sensitivity, as it applies within the context of
the Matamata-Piako Proposed District Plan:

Reverse sensitivity arises when new sensitive land-uses (for instance residential activities) locate in
close proximity to a lawfully established industry that may emit some adverse effects (such as noise or
odour). The “sensitivity” can create pressures on industry (through complaints), that may eventually
lead to restraints on the operation of the established industry, or in extreme cases to relocation. It is
the term used to refer to “the legal vulnerability of an established activity to complaints from a new land
use” (Tardy, B. & Kerr, J., 1999). In the Interim Decision of the Court, a distinction is made between
the “primary” or “emitted” effect on the one hand and the complaining response (the reverse
sensitivity) on the other hand, the latter being described as a “secondary” effect.

The following examples of where reverse sensitivity effects have typically occurred in the Matamata-
Piako district illustrate the distinction between primary and secondary effects:
   Rural dwellings locating within range of litter poultry or other large intensive farms, leading to
   pressures on the intensive farm to curtail its operations or mitigate its effects, due to odour or noise
   complaints from neighbouring residents;
   Organic growers adjacent to large horticultural operations, leading to complaints of spray-drift,
   eventually resulting in the horticulturalist having to restrict its operation;
   Arrival of lifestyle dwellers in near proximity to large rural processing plants such as dairy factories,
   creating pressure on industry to mitigate noise and traffic effects.

The meaning of “effect” is defined in Section 3 of the Resource Management Act 1991 (RMA) as:
“(a) Any positive or adverse effect; and
 (b) Any temporary or permanent effect; and
 (c) Any past, present or future effect; and
 (d) Any cumulative effect which arises over time in combination with other effects-
 Regardless of the scale, intensity, duration or frequency of the effect, and also includes-
 (e) Any potential effect of high probability; and
(f) Any potential effect of low probability which has a high potential impact.”

Considering this definition, the question arises whether reverse sensitivity qualifies as an adverse
effect in terms of the RMA. The Environment Court has considered this question in a number of its
previous decisions, for instance Winstone Aggregates & Auckland Regional Council v Papakura
District Council (A49/02) and Independent News Ltd v Manukau City Council (A103/03), and has held
that reverse sensitivity is an adverse effect under the RMA.

The purpose of the RMA, as defined in s5(1), is “to promote the sustainable management of natural
and physical resources”. The meaning of “sustainable management” (s5(2)) is: “managing the use,
development, and protection of natural and physical resources in a way, or at a rate, which enables
people and communities to provide for their social, economic, and cultural wellbeing and for their
health and safety while –
a) Sustaining the potential of natural and physical resources (excluding minerals) to meet the
     reasonably foreseeable needs of future generations; and
b) Safeguarding the life-supporting capacity of air, water, soil, and ecosystems; and
c) Avoiding, remedying, or mitigating any adverse effects of activities on the environment”
    [Emphasis added].
It follows therefore that there is a duty, the same as with any other adverse effect, to avoid, remedy or
mitigate reverse sensitivity effects, in order to achieve the RMA’s purpose of sustainable management.

Whether a reverse sensitivity effect should be avoided, remedied, or mitigated will depend entirely on
the specific, prevailing circumstances. For instance, if a new litter poultry farm seeks to locate on the
periphery of an expanding town, the likely solution is to decline consent thus avoiding reverse
sensitivity effects from arising. For, even if the new litter poultry farm can internalise its effects, it is still
highly likely that complaints will ensue as the town creeps closer. This occurs because people from
diverse backgrounds have different perceptions of what constitutes an acceptable noise, odour, traffic,
or any other effect. It is not just the actual effects that are at issue (with robust consent conditions
these can usually be dealt with through enforcement), but it is also the perceived or potential effects
as a result of a change in land-use that can equally result in a flood of complaints. Although, with
perceived effects, it is not suggested that unjustifiable complaints should be regarded as relevant
adverse reverse sensitivity effects.

Entirely different circumstances prevail when, for instance, lifestyle subdivisions occur within range of
an established dairy factory that generates adverse effects. In this instance, there may be no
justification to close or restrict the lawfully established factory so as to avoid reverse sensitivity effects
(assuming the operation is complying with the conditions of its resource consent). Action that
constrains significant industry may also not support the principle of sustainable management (which
requires the social and economic wellbeing of the community to be provided for). It may not be
possible, economically or technologically, to remedy or mitigate the primary effects to the extent that
reverse sensitivity will cease to be an issue. Under such circumstances it would seem that some form
of separation between the incompatible activities is the only method available to avoid (or at least
remedy or mitigate) reverse sensitivity effects.

The Environment Court has used a range of methods to avoid, remedy or mitigate adverse effects
depending on site specific circumstances, ranging from refusal of consent, to imposing conditions
requiring effects to be internalised, and in some instances imposing a buffer zone that would restrict
the activities of adjacent property owners around emitting activities. See for example Te Aroha Air
Quality Protection Group v Waikato Regional Council (no 2) (1993) 2 NZRMA 574; PH van den Brink
(Karaka) Ltd v Franklin District Council [1999] NZRMA 552; Hill v Matamata-Piako District Council
(A65/99); Winstone Aggregates & Auckland Regional Council v Papakura District Council (A49/02)
and Sugrue v Selwyn District Council (C43/04).

While there are different solutions for different circumstances, the Environment Court has identified
that some discernable principles should apply to reverse sensitivity. These are:
   i.  All activities must be required, in the first instance, to internalise their effects unless it can be
       specifically demonstrated, on a case by case basis, that this cannot reasonably be achieved;
  ii.   There is a greater expectation that newly established activities will internalise their effects, as
        opposed to existing activities that could be constrained by older technology or insufficient
        boundary setbacks.
 iii.   Total internalisation of effects within boundaries will not always be reasonably possible or
        feasible, and in those instances there is no requirement under the RMA to achieve total
        internalisation. See Catchpole v Rangitikei District Council (W35/03).
 iv.    Restrictions on the use of land adjacent to an emitting site are justified only if the activity is of
        considerable economic or social significance either locally, regionally, or nationally.
 v.     Where controls are placed within external buffer zones beyond the boundaries of the emitting
        site, such controls on the sensitive activity must be in an appropriate form (for instance a
        restricted or restricted discretionary activity status), to avoid the risk of creating a “tacit
        prohibition”. See Wellington International Airport Ltd v Wellington City Council (W102/97).
 vi.    Where there is a low probability that effects of a low impact will extend beyond the emitting site
        boundary, it is preferable (at least from a resource management point of view), to accept
        occasional minor adverse effects, rather than to place restrictions on adjoining sites in different

The Proposed Matamata-Piako District Plan recognises that reverse sensitivity effects can occur when
residential uses locate in proximity to industry and accepts that the Council (through its Plan
provisions) needs to ensure that those effects can be avoided, remedied or mitigated. In broad terms,
the Plan in its original form sets out a suite of reverse-sensitivity rules:

Scheduled Sites: The District Plan contains Development Concept Plans (DCPs) for certain large
processing sites (such as Wallace Corporation, Inghams, Fonterra, Meadow Mushrooms, ICHEM,
etc). The DCPs contain “tailor-made” rules, specific to every scheduled site, based on the
environmental effects of that activity and agreed levels of on-site environmental management. In some
instances, off-site environmental effects have been accepted by adjoining neighbours as part of the
DCP, for instance by means of noise control boundaries encroaching onto neighbouring sites. To
mitigate reverse sensitivity effects, the District Plan sought to impose an external buffer of 500 metres
from the boundary of any Scheduled Site. Within the external buffer area, dwellings, or subdivision
with a dwelling site, were identified as non-complying activities.

Intensive Farms (including Litter Poultry Farms): The Plan in its original form, sought to impose the
same restriction of a 500 metre external buffer around the boundaries of intensive farms (including
litter poultry farms), within which a dwelling or subdivision with a dwelling site was a non-complying

Effluent Treatment Ponds: The Plan proposed a 300 metre external buffer around existing effluent
treatment ponds, within which dwellings and subdivision with a dwelling site are non-complying

Motumaoho Quarry: It was suggested that the quarry should also become a Scheduled Site subject to
a DCP with the same 500 metre external buffer.

Prior to, and during the hearing the Council modified its position in respect of reverse sensitivity and
ultimately sought the Court’s sanction to impose standardised external buffers only in the case of
effluent treatment ponds, and two of the Scheduled Sites (the Fonterra dairy factories). For intensive
farms, a 500 metre external buffer was still suggested, but for litter poultry farms it was proposed that
the buffer would only apply to existing operations and would be reduced to 250 metres as measured
from the external walls of the broiler sheds.

Having heard the evidence the Environment Court, in its Interim Decision, directed that the Proposed
Plan be modified as follows:

Scheduled Sites: The Court found (except for the wastewater treatment plant at the Waitoa Site in
respect of which a 300 metre buffer was endorsed), that there was insufficient evidence to
demonstrate that Fonterra had taken all reasonable steps to internalise its effects. For this reason, the
external buffers were not justified. The Court also found that a 500 metre buffer could not be justified
in respect of the Inghams Processing Plant near Waitoa.

Litter Poultry Farms: The Court upheld the 250 metre external buffer, with the activity status of
potential sensitive uses locating within the buffer, being discretionary. The background to, and
reasoning of, the Court in reaching this decision is discussed in Paragraph 2.2 below.

Intensive Farms: As the proposed provisions relating to other intensive farms were relatively
uncontroversial at the hearing, the Court accepted that the 500 metre external buffer be endorsed in
respect of existing operations.

Effluent Treatment Ponds: The Court accepted a 300 metre external buffer as being justified, at least
from a public health point of view.

Motumaoho Quarry: The Court directed that the site be controlled by a DCP, with the noise boundaries
strategically placed at distances sufficient to mitigate the primary and secondary effects, rather than to
rely on an arbitrary 500 metre measurement around the entirety of the site. It should be noted that
during the hearing Winstones accepted that it did not require a 500 metre external buffer.

Litter poultry farming has been undertaken in the district since the 1960’s. The early farms were small,
one or two shed operations accommodating 10,000 to 20,000 birds per growth cycle. In 1990,
Inghams Enterprises took over the business of the former Harvey Farms and established new contract
growers on litter poultry farms dispersed throughout the District to supply the Company’s newly
acquired processing plant. This step provided new impetus for the rapid expansion of litter poultry
farming on a larger scale.

During the mid to late 1990’s litter poultry farming proved to be a controversial activity beset by
odorous emissions and numerous confirmed odour complaints. In the late 1990’s a close correlation
between odorous emissions and the type of feed used, was identified. Subsequently, Inghams
changed its feed formula, reducing animal protein in favour of plant protein. Around the same time,
other industry improvements were made, including improved shed design and management practices.
The improvements (particularly the change in feed) proved to be a significant innovation resulting in a
marked decrease in odourous emissions and complaints.

Aligned with the continued growth in the demand for poultry meat the Company has, over time,
expanded both its processing plant near Waitoa, and the hatchery in Matamata. In 2002, Inghams was
awarded a major contract to supply fresh chicken meat to the KFC franchise in New Zealand. In order
to meet its contractual obligations expansion of existing, and establishment of new litter poultry farms
have been ongoing. Also, construction was recently completed on doubling the capacity of the
processing plant from 80,000 to 160,000 birds per day (in terms of its DCP), and the hatchery has
undergone further expansion.

When the reverse sensitivity case was heard in mid-March 2004, there was a total of thirty litter poultry
farms in the district (all but one contracted to Inghams). In addition, plans were well advanced for
expansion at five of the existing farms and construction of four entirely new farms. The existing farms
were generally of three types and scales. The older farms dating from the 1970’s and 1980’s typically
consisted of one or two plywood buildings with wall and roof mounted extractor fans, each shed
accommodating up to 20,000 birds per growth cycle. During the 1990’s larger coloursteel-clad sheds
with automatically controlled wall mounted cross-flow fans were being built. Typically, four sheds were
being placed in parallel, accommodating 120,000 birds per farm (30,000 per shed). Since 2000, larger
sites have been developed comprising up to eight tunnel-ventilated sheds, capable of accommodating
360,000 birds per farm. Thus within the last decade, some small-scale operations have evolved into
large factory farming sites.

Collectively, the existing farms were capable of producing almost 3 million birds per six week growth
cycle (approximately 17 million birds per annum). The proposed expansion (which is now nearing
completion), would increase the capacity to nearly 4 million birds per growth cycle (23.5 million birds
per year). The farms are dispersed throughout the District, on properties varying in size from as little
as 1 ha to around 40 ha. The scale of the operations is equally diverse, ranging from small 10,000 bird
farms, to large 360,000 bird establishments. Total investment (existing and proposed farms and the
processing plant) is estimated to be in the order of $100 million, with total direct employment (district-
wide) in the poultry industry estimated at more than 500 people.

The 500 metre external buffer originally proposed in the notified version of the District Plan,
theoretically had the ability to affect large areas of the district. Approximately 5,000 ha of neighbouring
land would have been included within the various buffers, affecting 320 neighbouring land titles. By
comparison, the 250 metre buffer endorsed by the Court for litter poultry farms, has a much reduced
impact on 800 ha of adjacent land. Relatively small portions of the 140 neighbouring titles are affected.
On all of the titles affected, a building platform still exists outside of the buffer so that the ability of the
neighbour to construct a dwelling will not be lost, although it is acknowledged that it may not always be
possible for the neighbour to build in a preferred location without first obtaining a resource consent.

Litter poultry farming involves the intensive rearing of chickens in a controlled environment. Day-old
chicks are raised under controlled conditions for six weeks. Then, the soiled litter in the sheds is
cleaned out, replaced with new wood shavings, and sanitised before acceptance of the next intake.
The primary potential adverse effects associated with litter poultry farming are odour, visual, noise,
and traffic. Amenity effects are also known to occur. As a secondary effect, litter poultry farming is
known to give rise to reverse sensitivity.

Odour: Shed odours are a combination of ammonia and sulphide compounds and wet feed odours,
particularly noticeable during the last two weeks of the cycle when the birds have reached maturity,
and during shed clean-out. The factors that influence the intensity of the odours are the quality of the
feed, management practices, the efficiency of the ventilation system, local weather patterns and site
topography. Odour neutralising and masking systems have in the past been trialled as a method to
mitigate effects, but has not proved to be successful for litter poultry farms. Given the technology
employed in the industry, adequate separation to allow odours to dissipate is the only effective method
available to mitigate adverse odour effects.

Dust: Dust extracted from sheds via the ventilation system contains fragments of wood shavings,
excreta, feed and feather matter. The effects are usually more localised but can under certain
circumstances, still be noticeable up to 300 metres from a litter poultry farm. Dust effects, like odour,
are dependent on the moisture content of the litter, but the opposite holds with less dust being
generated by wet litter. Generally speaking, dust effects can be mitigated by appropriate landscaping
and plantings which can aid in the capturing and confining of dust emissions.

Traffic: The traffic effects of litter poultry farming include heavy vehicle movements associated with
harvesting, bird placement, feed trucks, litter loads and LPG delivery. Typically, a four shed operation
can result in average daily peak traffic generation of up to 13 vehicle movements over the two-week
period between growth cycles.

Noise: Noise effects associated with litter poultry farming include both traffic noise, and noise
associated with the operation of the ventilation system. In the case of ventilation noise, the worst case
scenario arises when extreme hot weather occurs at the end of the growth cycle. Modern broiler sheds
will then be ventilated in the “tunnel” mode, with large fans located at either end of the sheds,
operating at full capacity. Based on known sound pressure levels at the fans, it can be calculated that
ventilation noise will travel considerable distances of up to 200 metres before dissipating to levels
compatible with ambient rural noise.

Visual: Litter poultry farms comprise large structures with extensive floor areas (up to 16,000 square
metres in the case of an eight shed operation), not in keeping with the character of a rural
environment. Mitigation can be achieved by careful selection of the poultry farming site, cladding the
walls and roofs with non-reflective material which blends with the environment, and screen planting.
Amenity Effects: Adverse amenity effects can arise when odour, dust, noise, or visual effects escalate
to the extent where the operation becomes incompatible with the character of the adjoining rural

Reverse Sensitivity: Litter poultry farms are known to be susceptible to reverse sensitivity. An example
of this is the community pressure for closure of farms which mounted during the early to mid-1990’s,
before the feed formula was changed. While many complaints during that time were justified, there
was also an increasing incidence of neighbours becoming less tolerant to broiler odours (as compared
to other traditional rural odours such as silage), and of broiler farms being wrongly accused of creating
effects attributable to other emitters in the locality.

The Interim Decision of the Environment Court to uphold the reverse sensitivity provisions in respect of
existing litter poultry farms can be explained with reference to the above background, and the
principles identified by the Court:

Every effort must first be made to internalise effects: Given the present level of technology in the
industry, and notwithstanding every best effort, it will not be possible to internalise all the effects from a
litter poultry operation which does not enjoy adequate separation from adjoining property boundaries
and dwellings. While it was not demonstrated (on a case by case basis), that the effects could not be
completely internalised on each specific site, the Court accepted in this instance that an arbitrary
distance is justified given the complexity involved in measuring those effects, in particular odour. The
Court also held that it was inappropriate to require a DCP for each individual litter poultry farm. To do
so, would impose “an impossible burden on all involved”.

Expectation that newly established activities will internalise effects: The Court acknowledged this
principle, by excluding new litter poultry farms from the reverse sensitivity provisions.

Total internalisation will not always be reasonable: Where, such as in the case of (at least some of) the
existing sheds, either located on small properties, using contemporary technology, or of older design,
the Court accepted that there was no requirement under the RMA to achieve total internalisation.

Significance of the activity: Given the size of the litter poultry industry in the District and its importance
in creating employment and economic growth, the Court was satisfied that the industry as a whole
(rather than the individual farms on their own) was significant. Presumably, the same may not
necessarily apply in other districts where litter poultry farming is not as significant.

Activity-status of the sensitive use: The Court did not accept the proposed non-complying activity
status for the establishment of sensitive uses within the external buffers, but held that such uses must
be assessed either as discretionary or restricted discretionary activities.

To conclude, reverse sensitivity is an adverse effect under the RMA, and there is a duty to avoid,
remedy, or mitigate such effects in the interests of promoting sustainable management. In dealing with
reverse sensitivity effects, there are different methods available to planners. The selection of the
appropriate method will depend on circumstances.

The Environment Court has identified some discernable principles that apply to reverse sensitivity
which will provide guidance for selecting the appropriate method. In certain instances and subject to
rigorous criteria, the Court will even uphold restrictions on external buffer areas as a method to ensure
the sustainable management of the co-existence between potentially incompatible land-uses.

Pardy, B. & Kerr, J. (1999). Reverse Sensitivity – The Common Law Giveth, and the RMA Taketh
Away. New Zealand Journal of Environmental Law, 3, 93-107.

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