The Resource Management Act (RMA) legislation introduced a significant shift in how environmental offences are regulated — and how your insurance policy can respond.
Parliament passed the Resource Management (Consenting and Other System Changes) Amendment Act 2025, which is aimed at streamlining consenting processes and strengthening environmental compliance, last year. The Act received Royal Assent on 20 August and came into force the following day.
Key changes at a glance
- Fines under the RMA are now uninsurable: From 20 August 2025, insurance can no longer respond to fines or infringement fees under the RMA — even where charges were laid before that date, but the fine is imposed after
- Higher maximum penalties for environmental offences:
- Individuals: Up to $1,000,000 (previously $300,000)
- Companies/trusts: Up to $10,000,000 (previously $600,000) - Prosecution procedure updates:
- Maximum imprisonment for individuals reduced to 18 months
- All RMA prosecutions will now be heard by a judge alone (no jury trial) - What your insurance still covers: Defence costs (legal and expert) continue to be insurable under Statutory Liability, Directors’ & Officers’ Liability, and Environmental Impairment Liability for RMA prosecutions, where covered by your policy
What this means for your business
These recent changes mean RMA fines are no longer insurable. From 21 August 2025, all relevant insurance policies will exclude cover for fines imposed following any prosecution under the RMA.
This mirrors the approach under Health & Safety law: fines are uninsurable, but legal defence costs remain covered.
Regulators are now proactively reviewing compliance with resource consents — not just reacting to pollution events. Even technical non-compliance (that has not resulted in any pollution) can lead to prosecution.
Key implications
- Greater financial exposure: With fines now uninsurable, organisations will need to fund any RMA fines directly.
- Heightened compliance expectations: Councils and regulators have broader powers and are adopting a more proactive stance in enforcing consent conditions.
- Insurance remains important: While fines themselves are no longer insurable, Statutory Liability, Directors’ & Officers’ Liability, and Environmental Impairment Liability policies continue to cover legal and expert fees — expenses that are likely to arise as they play a critical role in negotiating and defending against the increased fines. Environmental Liability policies, in particular, provide broader protection, covering actual or potential breaches, and costs of clean-up and mitigation measures, as regulators increase focus in this area.
Recommended next steps
We strongly encourage you to:
- Review your RMA exposures across operations and update your internal controls
- Refresh staff training and incident response plans to reflect the increased risk profile
- Talk to us about your current Liability insurance programme and whether any changes are needed, including the potential to supplement with other polices
- If you are currently involved in an RMA matter, contact us so we can assist in discussions with your insurer
We’re here to help you navigate this change and continue to advocate on your behalf.
Please don’t hesitate to contact us if you’d like to talk through what this means for your business on liability@icib.co.nz.
