Crown Minerals Amendment Bill

Part 1 contains mostly technical amendments. Part 2 has most of the controversy surrounding this bill. However, in Part 1 there is a clause that I addressed when we were debating Part 1 last time round, and the Minister in the chair failed to explain what it meant. Now that we have Mr Duynhoven back in the chair—now that the Parliament has rescued Mr Duynhoven—I hope that we will get an explanation of exactly what is meant in clause 9. If we look at clause 9, “Unit development”, we see that it amends section 46(1) of the principal Act. It amends it by inserting in paragraph (a), after the words “2 or more permits”, the words “or existing privileges”. The reason this is important is that the question arises: what are those existing privileges? If we look back to the start of Part 1, to clause 3, “Interpretation”, we see that there is no definition of “existing privileges”. If we look further back in this bill we see there is no definition of “existing privileges”. Maybe the existing privileges are defined in the principal Act. It is possible, so I got the principal Act out to have a look. There is a whole list of definitions in the principal Act. Under the letter “e” in section 2 there are all sorts of things defined. “Enter” is defined, as are “Exploration”, “Exploration permit”, and “Enforcement Officer”, but there is no definition of “existing privileges”. The only place I can find those words mentioned is in Part 2 of this bill. I mention that only in passing because I am trying to find what “existing privileges” means.

Clause 22 substitutes new section 111, “Rights to new permits”. That section states: “(1) If, after … 5 pm on 19 September 2002, a holder of an existing privilege makes an application in respect of Crown owned minerals to which any of the enactments specified in subsection (2) would have applied if this Act or the Crown Minerals Amendment Act 2001 had not been enacted,”. That is the only reference I can find to existing privilege, which would imply that existing privilege relates to the extinguishment of property rights in clause 22 of this bill. If it does, a question then arises: OK—existing privileges may be protected for those who made applications prior to 5 pm on 19 September 2002—the date that Mr Duynhoven declared that property rights would be null and void. Now, it is possible, if that is what “existing privileges” refers to—matters that predated that date. Then it is unfair, because some people were advised that in fact they could not apply for extensions or variations of existing licences under the Mining Act of 1971, the Coal Mines Act of 1979, or the Petroleum Act of 1937, and therefore some people did not make application prior to that date. They were led to believe, they were advised, that those rights may have been extinguished by the Crown Minerals Act—the principal Act this legislation amends—back in 1991. But the High Court has suggested that those rights were not extinguished.

What is unfair here is this: does the existing privilege referred to in clause 9 have anything to do with that date and the fact that some people made applications to vary existing licences prior to that date and some people did not, because of advice they might have received? If in fact those existing privileges—and that is the only place I can find them mentioned in this bill, and they are certainly not defined in the principal Act—do relate to that date, and the fact that prior to that date matters are still to be decided by the Court of Appeal, then clearly there is an unfairness. Some people may have existing privileges defined by the court, and other people, by this legislation, will have those same rights denied them. That is clearly unfair if that is the case. So I think it is only reasonable for the Minister in the chair, who specified that date of 5 p.m. on 19 September 2002, to explain to us exactly what in clause 9 those existing privileges are.

Like my colleagues before me, I want to make it very clear that the National Party does not support the passage of this legislation, primarily because it is simply not fair. It does not appeal to what Kiwis really believe is a sense of fair play—because we cannot do things retrospectively. Like my colleague before me, I have had a look through Part 1, and I also conclude that it is fairly technical. I have had a look at clauses 7, 8, and 9, which deal with the surrender of permits, transfers and other dealings with permits, and also with the issue of unit development. In particular, I, too, will focus on existing privileges. I want to take up the challenge that my colleague Lockwood Smith has issued to the Minister in the Chair, the Hon Harry Duynhoven, and ask him to take a call and explain exactly what that deals with. I think that that is only fair and reasonable.

For the sake of clarity, I remind members what the legislation is dealing with. The bill prevents mining licensees from renewing their mining licences under the now repealed Mining Act and Coal Mines Act. As a result of this amendment, miners must now reapply under the Crown Minerals Act, not the Mining Act or Coal Mines Act that originally applied. What sort of bureaucracy this will lead to, and what sort of prohibitive cost, I can only imagine. I do not see these types of costs picked up in Part 1, and that is why I was hoping that the Minister in the chair would take a call and explain whether, under existing privileges, this issue was going to be addressed. What I think this will do—there is no doubt at all in my mind—is undermine the confidence of people in this industry. An industry like this, which is capital intensive, relies on being able to attract capital. If an industry cannot attract capital, it loses investment opportunities, and the resulting loss in confidence will also have an impact on revenue.

The bill has arisen out of a High Court case, Glenharrow Holdings Ltd v Attorney General, which held that the principal Act did not extinguish the rights of mining licensees. But the Government, rather than accept this decision, basically spat the dummy. It did not like the umpire’s decision, so, essentially, it has done what any petulant child does in the playground—it picks up its bat and ball, and goes home. Regardless of the time and money invested by large corporations in what was hitherto a highly respected industry, the Government has decided to change the legislation retrospectively. Of course, retrospective legislation is not new to the Minister in the chair. There is one rule for Harry Duynhoven MP, and one rule for those in the mining industry. So, again, I ask the Minister in the chair to take a call and explain to members what existing privileges we are talking about. I think that this is probably the worst example of abuse of executive power that I have encountered.

In the first reading debate, Minister Swain said this legislation would not be enforced retrospectively. But it is happening. He said that any mining licensee variation application received before the amendment is enacted would be accepted, and the process under the current regime. But we find, when we get to Part 2, that clauses 22 and 23 contradict this statement. That is not fair and it is not reasonable. That is why the people of this country will oppose this bill when they understand the detail. I also picked up on a press release from one of my esteemed colleagues, Pansy Wong. She argues very cogently that the people in the mining industry had not been consulted, despite assurances from the Minister that consultation had been undertaken. This is the type of consultation that has gone on around the Kyoto Protocol, the flatulence tax, and the seabed.

I move, That the question be now put.

As has been outlined by my colleague the Hon Lockwood Smith, Part 1 contains largely technical amendments, and I turn to some of the information we have with regard to that part. Some substantial matters have been raised by submitters. I would like to draw the Committee’s attention to the definition of coal, in particular, and where the gases that are produced by coal come in, in the definitions. The submitters want this definition clarified. That matter is not clarified in this bill, even though it was raised by a number of submitters.

In the principal Act “coal” is defined as meaning “anthracite, bituminous coal, sub-bituminous coal, lignite, peat, and oil shale; and includes every other substance worked or normally worked with coal:”. However, the gases that are produced are largely related to petroleum and should probably, in that context, be clarified in this bill, to identify that they are not associated with coal but are associated with petroleum. It was asked that the definition of coal be included to ensure that it excludes natural gas and oil occurring within a coal or a coal measure, and clarify the definition of “petroleum” to explicitly state that it includes hydrocarbons naturally occurring in association with coal.

That issue has not been addressed in this bill. I believe that is a considerable oversight, when this was a matter that was substantially raised by submitters. I ask the Minister to take a call and explain why it has not been clarified. Maybe he would like to consider an amendment at this late stage to give some certainty around where these definitions fall. I reiterate that it is necessary to clarify the definition of coal to ensure it excludes natural gas and oil occurring within a coal or coal measure, and to clarify the definition of “petroleum” to explicitly state that it includes hydrocarbons naturally occurring in association with coal.

This issue has arisen in other jurisdictions. The example of Queensland, Australia was given. If consultation had been more extensive and perhaps more adequately done, as identified by my learned colleagues, it might have highlighted this issue and something may have been done about it. However, it is not too late, if the Minister so chooses, to make a change. The provision in the Queensland legislation—the Petroleum Act of 1923—may have helped in that regard. Its section 150 did identify coal in that definition. So the Government has had substantive material available to give it the information necessary to make that type of amendment. It would have been a pretty simple sort of amendment. That is why I am raising it here in Part 1, because that is where the definitions are covered. The Government has managed to identify “occupier” and changed that, but it has not managed to change the simple definition of “coal” or “petroleum”.

I note my learned colleague has also brought forward another amendment that has not been addressed, and that is the definition of “existing privilege”. Quite rightly, he pointed out that existing privilege had not been identified in the Crown Minerals Act, nor has it been addressed in this amendment bill. So there has been some failure on the part of the Minister in addressing these shortcomings in the bill.

One of the other things I would like to address is section 36(1)(b), in clause 5. There is a change, by inserting after the words “permit relates”, because “permit relates” is not in section 36(1)(b) but in 36(1)(c) in the original Act, the words: “or decrease the minerals to which the permit relates,”. The Minister can extend the duration of a permit or restrict the minerals to which the permit relates.

I move, That the question be now put.