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Contaminated Land Options

Contaminated Land Options

Mason Reed explains why a property registered on a contaminated land database can present an opportunity for investors.

By: Mason Reed

1 June 2019

Occasionally stories about contaminated land in New Zealand make the national media. Other than being quickly forgotten about, what do these properties have in common? HAIL. Whilst HAIL can be used to describe a good winter’s day on the West Coast, it is also an acronym for the Hazardous Activities and Industries List. As its name suggests, it is a list of activities and industries that have a high probability of causing land contamination due to historical use, storage or disposal of hazardous substances.

Developed in October 2011 by the New Zealand Ministry for the Environment (MFE), it is a fundamental component of the Resource Management (National Environmental Standard for Assessing and Managing Contaminants in Soil to Protect Human Health) Regulations 2011 (effective January 1, 2012) commonly referred to as the “NES”. Each territorial and unitary authority in New Zealand is required to implement the NES under the RMA 1991, which requires councils to have a HAIL register (which identifies land that has the potential to be contaminated due to its historical use).

Whilst HAIL activities include the more obvious industrial manufacturing, storage and use of hazardous substances like pesticides, coal products, petroleum products and timber treatment, it also includes seemingly benign activities like sheep-dipping, market gardens, orchards, sports fields and dry cleaners.

So how does this affect property owners? According to New Zealand property law, if you own a property, you are responsible for any contamination associated with it, even if you did not cause the contamination or weren’t aware of the contamination when you purchased it. This is the principle of caveat emptor, or “buyer beware”.

Under the NES land is considered to be actually or potentially contaminated if an activity or industry on the HAIL list has been, or is more likely than not to have been, undertaken on that land.

The NES specifies five activities on land where there is a potential for soil contamination to have an adverse effect on human health:

• subdividing the land

• disturbing the soil

• changing the land use

• sampling the soil

• removing or replacing all, or part of, a fuel storage system.

If you are considering undertaking any of the five NES activities on land (which could also include adding a simple building extension to your house), a site investigation is required, which the NES requires to be undertaken by a suitably qualified environmental professional (SQEP). These are typically undertaken in the following staged process:

• Preliminary Site Investigation (PSI)

• Detailed Site Investigation (DSI)

• remedial action plan

• site validation report

• ongoing monitoring and management plan.

It is important to note that just because your property is on a TA contaminated land database, it does not necessarily mean it is contaminated. It should also be noted that, in some cases, it is only necessary to undertake a PSI in order to identify the risk of contamination affecting the subject site, with no need for undertaking more expensive soil sampling and laboratory testing. This is important to note because some buyers get put off from purchasing sites when they hear they are a HAIL site. This creates opportunities for savvy investors (who do the appropriate due diligence work) as the potential contamination of the site may not, in reality, be an issue.

It is important if you are having a site assessed for potential soil contamination that you engage an appropriately qualified and experienced environmental engineer, as the remedial works, if required, can vary in complexity and costs (and can be very expensive). I would therefore recommend, prior to engaging your consultant, that you confirm the consultant has SQEP accreditation.

Asbestos awareness is also increasing throughout New Zealand, and is included in the HAIL as “manufacture/disposal of asbestos products, and buildings containing asbestos products known to be in a deteriorated condition”. Due to its unique characteristics and toxicity, assessing and managing asbestos risks covered by the BRANZ New Zealand Guidelines for Assessing and Managing Asbestos in Soil 2017, which aligns with the NES, and also requires the use of a SQEP.

Fraser Thomas is a multi-discipline engineering and land surveying firm. We have offices in Auckland (Highbrook and Mt Eden) and also an office in Christchurch. We are soon opening offices in Hawke’s Bay and Queenstown. We offer a “one-stop shop” for engineering and land surveying services required for building and land developments. This year the company is celebrating 50 years in business. If you require any engineering or land surveying services, call Mason on 021 979296 to discuss your project.

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