Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill

Now, honourable members, we need to focus our minds on Part 4. The debate on Part 4 is clauses 133 through to 149A, clause 16, and clauses 150 to 157.

Part 4 of the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill is very important because it contains the transitional provisions for the legislation, which is how we deal with those activities that are currently under way and now need to be brought into this scheme, and those who have been granted consents under the Crown Minerals Act but have not yet started that activity. It also deals with future transitional provisions for the changes in regulations that might occur under future Governments, and under the next Labour Government obviously there will be changes.

I just want to start by saying these are significant changes from what we saw at the Local Government and Environment Committee—significant. And it is actually very, very difficult to fully understand the impact of these changes when we are not able to sit down with officials and talk through what the various changes mean. It is, again, very disappointing that this was not dealt with at the select committee. The advantage of delaying this bill by just a couple of weeks, bearing in mind that there was quite a generous period between it leaving the select committee and coming back to the House for it second reading, would have been that the regulations would be available so that we could take a more holistic view of the bill—the legislation alongside the regulations—and deal with these transitional provisions if there were significant problems with them, which there must have been because we are making quite drastic changes and quite large changes compared with what the select committee finally decided upon. In the reading of these changes it appears that in tightening up the purpose clause—and I reiterate that we do no think that goes far enough in meeting our international obligations—there has been a lot of loosening up in other areas to avoid a backlash from industry. That would be my reading of what has happened in the transitional provisions here.

When I say it is really difficult to fully comprehend whether some of the changes are minor or significant, I am talking about changes like that in clause 149A. If we look at subclause (4) of that, it used to say in the existing bill that came back from the select committee that the impact assessment had to comply with clause 40. When we look at clause 40, we see that it describes what an impact assessment must contain. It goes through everything that assessment has to do and what it has to contain. It goes into great detail. Well, that requirement to comply has just been removed from the legislation completely and replaced with something else about incomplete applications. I am not sure why clause 149A(4), relating to clause 40, was removed, given that these are people who do not have to go through the full process but, instead, have to provide an impact assessment, and we are now saying that the clause that describes what has to be in an impact assessment no longer applies. That may be something that is minor. It does not seem like something that is minor. It seems like something fairly significant. And it is the same when you look at new clause 149A(7), which states that subclause (5) overrides clause 15. When you go back and look at clause 15, you see that clause 15 is actually one of the most important parts of the bill. It is in Part 1A, “Duties and restrictions”, and it is the restrictions on activities in the exclusive economic zone and in or on the continental shelf. It goes through in some detail what must not happen in the exclusive economic zone about the environmental damage that could occur. It is a very important clause. Subclause (7) of this new clause might just be something that is technical. It might be that these are transitional provisions so that part no longer applies, but this was not raised with us at the select committee, and whenever I see something overriding a significant part of the legislation, I would like to know why. The other disturbing thing is that the Minister’s explanatory note is completely silent on this. It does not explain why this is happening. So I would like the Minister in the chair, the Minister for Courts—who was actually a member of the select committee for some of this—to take a call on this.

💬 Grant Robertson: The former Minister could take a call.

Yes, the former Minister could take a call and explain, if he knows the answer to that, because these are wholesale changes to what we decided at the select committee.

We are now no longer saying that when you are providing an impact assessment you have to have reference to the clause that says what has to be in that impact assessment, and we are overriding a very serious clause about the duties and responsibilities and what cannot happen under the exclusive economic zone. I think it is only fair to ask what the practical impact of that is going to be, why we are doing it, and why this was not raised as an issue at the select committee.

We had the clauses for existing activities, and again, as I said, these changes have been made and we would like to know the answer to that. But now we have a whole new set of transitional provisions for planned activities. We went through the clauses in the select committee around existing activities, and these are things that are already happening out there, so that is fine. You have got to transition them in. You cannot just say, well, on the day that this legislation passes, you have to stop doing what you are doing until you get a marine consent. I absolutely understand that. We have concerns around how far that might extend, where people have not really already started, or where people might rush to hurry up and get in. We were assured that, no, this was just existing activities. This is where people are already doing it, and it would be unreasonable to expect them to stop just because we pass a law, given that everything was consented and everything was approved under the previous legislative situation.

Then the Minister’s Supplementary Order Paper came out, and suddenly we are talking about planned activities, not just existing activities. The definition of planned activities means “an activity involved with the exploration, prospecting, or mining for petroleum”—and the same occurs with minerals—“if—(a) before the Act comes into force, the exploration, prospecting, or mining for petroleum with which the activity is involved is authorised by a permit that was granted under … the Crown Minerals Act 1991 … and (b) the activity had not commenced before the Act comes into force.” We are no longer dealing with existing activities. We are now dealing with other things. It is a question that I asked of the Minister in Part 1A, and she said she would come back to it in Part 4, because she felt that is where the discussion on transitional provisions should occur. What I want to know is, if we take the example—because when we are talking about transition activities the problem is we are actually talking about specific cases the public knows about now and is concerned about now. It is not kind of in the theoretical, in the future, that we might be doing some stuff out here. Actually, there are cases and there are permits that have been granted right now, that are sitting there. Off the East Coast the Petrobras permit, which has been granted, is a well-known example.

Petrobras has carried out only seismic surveying so far. It has said it wants to drill some exploratory wells. We are talking 3,000 to 4,000 metres deep, and that obviously raises significant concerns in the community that I live in about the feasibility of doing that. What happens if something goes wrong? We notice that Anadarko Petroleum Corporation, in far less deep waters, has recently pulled back because of the inability to get a rig. The rigs for deep water are not that common. They are not like the smaller rigs. But it does beg the question: if it is so hard to get a rig to do the initial drilling, how easy is it going to be to get a second rig to drill a relief well, which is what you are going to need in waters of that depth, because you cannot cap at 3,000 to 4,000 metres deep? Does this mean that if Petrobras wants to go ahead and drill that well, it no longer has to get a marine consent because it was a planned activity? Does it mean that Petrobras can now go ahead with the exploration and mining, because it was a planned activity and it has already been granted the permit? I do not know the answer to that question. I am hoping the answer to that question is no. As soon as Petrobras decides it wants to start drilling, it is going to have to go through the marine consent process, because that activity has not started yet. In fact, it is a long way off, I suspect, particularly given some of the reported financial problems the company is having. But my reading of this is that even if it was not what it was intended, it could very easily be interpreted—and, again, we do not want more legal battles over defining it—as saying that because it has been granted a permit under the Crown Minerals Act, that makes it a planned activity. It means that it could go ahead and continue, not just a seismic survey, which is fine, but also exploratory drilling and potentially mining in the Raukūmara Basin 3,000 to 4,000 metres deep, without my community getting to have a say and without going through the full marine consent process. If that is the case, then that is deeply, deeply worrying, especially as the Government is issuing a large number of these permits right now.

Suddenly, that issuing of the permit process that is going on now carries a much greater significance if, by getting one of those before this legislation passes into law, that gives you rights out into perpetuity to be able to go through exploration, exploratory drilling, and mining without going through any process that examines the environmental impact of those activities. I sincerely hope that the answer is no, it cannot, in which case the question will be why we are even having to recognise planned activities. If it has not gone ahead, why are the existing activities provisions not strong enough to deal with that? If there is some little difficulty that needs to be fixed, then why are we not just patching up or strengthening, beefing up, the existing activities provisions, instead of creating this whole new class? I hate to be cynical, but I really feel that this was the trade-off with industry, that when they saw the word “balance” going, which was something they really wanted in the purpose clause, they said: “Well, what are we going to get in return?”. I suspect that this is what they got in return.

Part 4 of the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill is entitled “Miscellaneous, transitional provisions, and consequential amendments”. Some of the consequential amendments, like the big slab in the Minister’s Supplementary Order Paper 100 in relation to the Biosecurity Act, are not a problem. But the section, as Moana Mackey has outlined, around planned petroleum activities and some of the provisions as they relate to mineral prospecting and exploration under the Continental Shelf Act are deeply troubling. That is because these amendments have come in now. There has not been an opportunity for the Local Government and Environment Committee to look at them. There has not even been the Minister providing a commentary on them when introducing them. The Supplementary Order Paper has, I think, a few lines about them, but that is all. And because of the detail here and the complexity, the full scale of the impacts is not clear.

But from reading the Supplementary Order Paper and the bill to date there is this whole notion in clause 151AA on the Supplementary Order Paper about “Mineral prospecting and exploration may commence and continue” if the company had a licence granted under the Continental Shelf Act 1964. This licence has been granted, but the holder of the licence may not necessarily even have commenced the activity. It is not just that they actually commenced and had some sort of existing use rights. It is allowing a whole class of activity to happen without the requirements for a marine consent, because this clause overrides clause 15, which, of course, is where all the provisions around getting a marine consent are set out, and it allows an activity that is not even under way at the moment to go ahead. That seems incredibly permissive, particularly around exploration, for example, for phosphate or activities like that. So that is one clause that we have got quite major problems with.

Then there is clause 151A about planned petroleum activity. It is very interesting that the Supplementary Order Paper amendment to clause 151A changes the bill to make sure that the activity is planned—and, of course, there is no definition of “planned” in clause 4, the interpretation clause, so it has got very wide scope. What does “planned” mean? Is it just an idea in the strategy section of a big oil exploration corporation? That term is not defined, so it has got very wide scope.

In the Supplementary Order Paper there is quite a significant change. In the bill as introduced, the activity could continue without a marine consent until 1 May 2013. The Supplementary Order Paper has extended that for another year. It is interesting that Anadarko Petroleum Corporation is not coming here this summer, because it has had difficulties getting a rig. Is this the “Anadarko amendment” that would allow it to go prospecting without getting a marine consent under the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill when it passes? Is this Supplementary Order Paper to allow Andarko just to go through and put in an impact assessment on a voluntary basis, but not go through the statutory provisions?

It would be helpful if the Minister in exile took a call on this to give us some assurance that this has not been the quid pro quo amendment for the industry. It is very troubling that that has been extended by a year, and that we have got activities that were given licences under 1964 legislation that predates the whole consideration and assessment of environmental impact that we have had through the Resource Management Act and through this bill, and that are allowed to continue, even if they have not started yet. That is deeply troubling about this miscellaneous part of the bill.

I rise to speak on Part 4 of the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill. Yes, it does cover a series of miscellaneous issues, including the transitionary provisions and consequential amendments. It is really the nuts and bolts of how this legislation will work. It covers things like the detail of the cost recovery provisions, the servicing of documents, the rules and regulations around sensitive information, and waivers and exemptions. Finally, it includes a schedule relating to inspection powers.

We know that this legislation is part of a whole suite of Acts that cover the exclusive economic zone and the continental shelf marine environment, and that it fills the gaps. This bill provides the legislative framework to manage and monitor activities, and protect the environment. There are significant amendments to be made to existing legislation, which are also done in Part 4.

I would just like to focus on the transitional provisions, particularly clause 151A. Moana Mackey was saying that she is having difficulty understanding these clauses, and I would like to explain. Also, Eugenie Sage asked us a question about clause 151A. This clause concerns activities such as prospecting, exploration, or mining for petroleum that are authorised by a permit. A planned activity is authorised by a permit. That permit is granted under section 25 or section 107 of the Crown Minerals Act 1991. In other words, these are activities that are legally permitted before the bill that we are talking about now comes into force.

The bill requires operators to prepare an impact assessment and provide it to the Environmental Protection Authority. However, under the Minister for the Environment’s Supplementary Order Paper 100, this activity may continue without a marine consent after the date that the legislation comes into force, for 12 months or to the very latest date of May 2014. That also answers Moana Mackey’s question about Petrobras. As it is, Petrobras does not have a mining permit, so it cannot mine; it can only prospect. It has an exploration permit. But the transitory provisions last for only 12 months after the regulations become law, with a final date of May 2014. So, finally, whatever happens, the end of that happens in 2014. Then it has to go to the marine consenting process.

It may seem that the Minister’s Supplementary Order Paper gives prospectors more leeway than the original bill, but this is not the case. Let me explain. Clause 151A concerns prospecting information. The original bill required an application for marine consent to be made within 6 months—so we had to put the marine consent in within 6 months—but work could continue until the final decision was made on that application, which could be 12 months. What the Minister’s Supplementary Order Paper does, does not change the outcome. The problem with the timing of the original bill was that the prospecting work would have already been completed before the consent decision was made. Therefore, the consent would be redundant, which actually would have made a bit of a mockery of the whole process, and I do not think it would have been a good way to introduce our new legislation. Prospecting for petroleum takes place only in the summer months, so there would be no activity under way while the company was preparing its consent, up until November 2013. But while it was waiting for that decision, the work would be under way and completed before the consent was issued in May 2014.

The Supplementary Order Paper no longer requires an interim marine consent application, which, as you can see, would come only after the work had been done, so would have been a waste of everybody’s time, but it definitely requires a consent before the following prospecting season. So the Minister’s change does not affect the outcome. It is not a softening up of the legislation, but it does give more certainty to those who have planned authorised activities during the summer of 2013. I have to say that I think that is a reasonable and rational decision, which gives credibility to the legislation. There would be nothing more galling to somebody who was prospecting than to have to go through all the process of applying for a consent and waiting for the decision, but by the time the decision came the work had been done. It would be foolish if it was refused, and, of course, it would have no use at all if it was approved. Thank you.

Mr Chair, I thank you for the call, and I thank the member Nicky Wagner for her contribution. I want to make a general comment about the matters on Supplementary Order Paper 100 that cover Part 4 of the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill, and then raise some specific questions about those changes. The general comment is to say that there are significant changes in this Supplementary Order Paper as to how the transitional provisions will work.

The member who has just resumed her seat has given an explanation around one of those—around the Supplementary Order Paper changes to clause 151A—but there are others, as well, around clause 149A and, in particular, around new clause 151AA, that are major changes. It would have been good to have had select committee consideration of those. I am not doubting the word of the member or anything like that, but to understand the impact of this with an Supplementary Order Paper that finds its way to us just a couple of days before we come to debate it is not satisfactory. We have said time and time again in this process that what everyone is after is certainty. What people want is the opportunity to be able to understand what the requirements will be, and, frankly, in this particular part of the Supplementary Order Paper, all we have got is uncertainty and questions that remain for us about what the impact of these changes will be.

The member who has just resumed her seat says this is not about making things easier for those who already have licences to prospect or who have had consents granted. Although that is what she says, what is on the paper in front of us looks like a regime that has been designed to make it as easy as possible for those companies that are there. It has some very flexible language inside it. It moves from “existing” activities to “planned” activities, and what we on this side of the House want to know is that the scope of any planned activity is limited. When I look at clause 151A I am not certain I get that, especially because we have references within clause 151A back to earlier clauses. As Moana Mackey said, we were hoping that the Minister for the Environment would be able to get up today and explain to us how clause 151A works in with the earlier clauses around assessments. We have had some comment on that from the member who has resumed her seat, but I do find it difficult to accept that this could not have gone back to the Local Government and Environment Committee to clarify it, because I suspect that in future years we are going to have to come back and do just that.

I just want to speak about clause 149A before I come back to new clause 151AA. Clause 149A is around existing petroleum activities becoming discretionary. I want to note particularly that what happens in clause 149A is the overriding of clause 15 of the bill. That is where our concerns start, because clause 15 of the bill is a very important clause within the bill. It actually gives the powers to the Environmental Protection Authority around what restrictions there should be. These are the kinds of things that people would like to see in any piece of legislation that comes through to this House, where we are actually trying to make sure that we have clear rules and clear guidelines for everybody involved.

I know we are not supposed to refer back to parts, but it is relevant because subclause (5) of the amended clause 149A overrides clause 15, which has already been passed and is around the restrictions on work in the exclusive economic zone. It is around things like the construction, placement, alteration, extension, removal, or demolition of structures, submarine pipelines, or submarine cables; the removal of non-living natural material; the disturbance of the seabed or subsoil; the deposit of any thing or organism in the seabed; and the destruction, damage, or disturbance of the seabed in a manner that is likely to have an adverse effect on marine species or their habitat. That is clause 15.

Subclause (5) of the amended clause 149A overrides that. That is a very significant thing to be doing within a clause that has just arrived on a Supplementary Order Paper, telling us that for existing petroleum activities we do not have to worry about any of that. That will be because there are already restrictions within the permits and the licences that people have, but I cannot compare those at the moment. As a member of Parliament expected to look at this bill, I cannot compare back with what those existing licences are. All I know is that we are about to pass—if the Government gets its way—a clause within a bill that tells me that none of those things matter any more, and that, for those activities, all of those things are out the door. From our point of view, the destruction, damage, or disturbance of the seabed in a manner that is likely to have an adverse effect on marine species in their habitat is a serious matter. So this is why we have a problem with these new clauses being dropped on the Committee by way of a Supplementary Order Paper, because we should be able to go back and look at what the impact of this is.

The last matter I want to raise is around the new clause 151AA, because I think this is an area, as my colleague Eugenie Sage has already expressed in this debate, where we have got a whole new area around planned activities—not just existing activities—and these are activities with licences granted under the Continental Shelf Act 1964. The issue we have here is, firstly, that we are not talking about just existing activities. We are talking about planned activities, but they may not even be activities, as Eugenie Sage has said, that have begun. These are licences that potentially have been held for some time, yet we are expected to say “Well, that’s fine, they can just carry on.” That is not an argument about certainty. These activities, in many cases, have not even started yet, and we are saying these activities do not now need to be subject to the new legislation that we are putting in place today.

Again, this was dropped on us at the last minute, it was not discussed in the select committee, it has not had the scrutiny that people would expect—

💬 Paul Goldsmith: You would never do that, would you?

Well, Mr Goldsmith says we would never do that. I do not know that we have. Does it make it right, Mr Goldsmith? Does it make it the right thing to do to drop something in the Committee in an area where everybody across the Committee wants to create the most robust law that we possibly can? That is the problem we have got—having something dropped on us, where we do not know whether we are actually going to be able to create the most robust law that we can.

So we have a concern now that we are creating two or three different regimes for planned activities under different laws that will not be under the new processes that we have agreed to today. That is inconsistent, potentially dangerous, and not what we would like to support. Unless the Minister is able, or a member of the Government is able, to stand and reassure us around new clause 151AA, we do not believe that that is a clause that we could possibly support. Overall, we think that this is an example of why the Government should send this particular Supplementary Order Paper back to the Local Government and Environment Committee to enable proper scrutiny.

The question was put that the amendments set out on Supplementary Order Paper 100 in the name of the Hon Amy Adams to Part 4 be agreed to.