By: Neil Beadle and Finlay Watson

What has changed?

New Zealand’s Resource Management Act’s new maximum fine of $10 million for corporate offenders has attracted significant attention.1

For large corporates, the message from New Zealand Parliament appears clear. What was once a $600,000 maximum fine has become $10 million. The intent is plainly to expose serious environmental offending to significantly greater penalties.

But what does that mean for dairy farmers and other small commercial operators?

As the new maximums apply since August last year, cases are filtering through to the Environment Court to address this question. While Parliament has signalled that environmental fines should increase, the debate is not whether penalties should go up, but by how much and for whom.

Historically, sentencing for environmental offending has focused on culpability, environmental impact and the circumstances of the offender.2 The courts have generally adopted a fact-specific approach, recognising that the scale and characteristics of the offender remain relevant, and that corporate status alone does not determine the penalty imposed.3 Most cases fell within the moderate offending category where the starting point for a fine for a small commercial operator would be between $50,000 and $100,000, with credit given for mitigating factors such as guilty pleas, good character and remediation.

Parliament clearly intended environmental offending to attract higher penalties. However, it did not prescribe a new sentencing framework. The key question is how existing sentencing principles should operate in a significantly altered penalty landscape, particularly for small and medium-sized businesses facing a maximum corporate fine that has increased more than sixteen-fold. In recent court proceedings the prosecutor has sought a 10-fold uplift on the range previously applicable. The decision is awaited.

Takeaways

At the heart of the debate is proportionality. Arguably the court must give effect to Parliament’s clear intention to increase penalties while ensuring fines remain proportionate to the offender, the offending and its environmental consequences.

While it is unlawful to insure these fines, insurance provides support for those facing investigations and prosecutions by paying for experienced lawyers and experts best placed to assist in these situations. How the court strikes the balance in arriving at fines under the new regime will be closely watched by regulators, insurers and the rural sector alike.

Key contacts and updates

We are well placed to advise insurers and brokers on the implications of the new penalty regime.

Please contact our authors or a member of the WK New Zealand Statutory Liability team for assistance:

[1] Resource Management (Consenting and Other System Changes) Amendment Act 2025. The Act increased the maximum penalty for environmental offending from $300,000 to $1 million for individuals and from $600,000 to $10 million for companies.

[2] Chick v Manawatu-Wanganui Regional Council HC Palmerston North CRI-2006-454-62, 27 July 2007. Chick remains the leading authority on culpability for RMA offending and established the sentencing bands commonly applied in environmental prosecutions.

[3] Trent v Canterbury Regional Council [2021] NZCA 123 at [35]-[37] and Walling v Waikato Regional Council [2023] NZHC 3437 at [12]-[14]. The difference between corporate and individual maximum penalties does not dictate the fine imposed in any particular case. Sentencing remains focused on the circumstances of the offender and the offending.