Uncertainty about the impact on the marine environment over-ruled "modest" economic benefits of the proposed Chatham Rock Phosphate seabed phosphate mining initiative, the decision-making committee appointed by the Environmental Protection Authority concluded in its decision, released today.

It was not persuaded by arguments from the fishing industry and iwi that the proposals would have had any significant impact on fisheries or spawning grounds, but it did conclude CRP would not be able to do enough to "remedy, mitigate or avoid" the impact of its proposal to dredge the sea-floor for phosphate nodules. The company believed its plan could replace phosphate imports for farm fertiliser and create a new export industry.

In particular, the committee found the presence of rare, vulnerable and "potentially unique" stony corals in the 5,207 square kilometre marine mining licence area was a deciding factor in declining the application, although EPA officials made clear at a media briefing in Wellington that there was no firm information about the presence of corals outside the CRP application zone.

"Not much is known about the corals," said the EPA's general manager for applications and assessment, Sarah Gardner. "It would be fair to say there's not as much detail to make a good assessment of whether they are present anywhere else. There was far more information available in the 820 square kilometre area than in the broader 5,000 square kilometre area" and no information on whether bottom-trawling by the fishing industry was destroying such corals elsewhere.

While CRP made proposals for "adaptive management", which would have allowed mining to start and be modified to meet environmental standards as the project progressed, the committee found too much uncertainty existed to allow such an approach.

The committee also did not accept the economic benefits of the project, as calculated by CRP, and regarded them as "modest" at best.

Also swaying the decision to decline the application was the fact the mining area is inside a Benthic Protection Area, which prevents the fishing industry from bottom-trawling, a widely used practice elsewhere on New Zealand offshore seabeds and not covered by resource consent or EPA processes.

The decision is the second from an EPA committee to decline a seabed mining licence and follows the rejection last June of an application to dredge ironsand off the southern Taranaki coast by Trans-Tasman Resources. TTR is considering reapplying for a marine consent under the new regime governing exploitation of economic resources in New Zealand's vast Exclusive Economic Zone, which extends from the 12 mile nautical limit to 200 kilometres offshore.

CRP chief executive Chris Castle expressed dismay at the decision, saying it sent a "closed for business" signal to would-be investors in New Zealand mineral resource extraction. CRP had spent $33 million and seven years on its applications. TTR says it has spent $70 million on its failed application to date.

Environmental groups welcomed the decision, with Kiwis Against Seabed Mining hailing a "victory for good science."

Environmental Defence Society chairman Gary Taylor said the decision-making committee had fulfilled the requirement to "favour caution and environmental protection" where insufficient scientific certainty exists.

"What the refusal of this application and the earlier one by TTR demonstrates is a clear need for a planning framework for our exclusive economic zone. It is a big ask to expect an applicant for a single project to provide all the baseline information required in the absence of any strategic planning guidance as to what kind of activities are acceptable and where.

"A system of marine spatial planning, based on good quality science, is needed to resolve potential conflict between potential users of the marine environment. In this case, for example, the mining was over a benthic protection area, set aside under different legislation," Taylor said.