Crown Minerals Amendment Bill

Thank you, Madam Assistant Speaker. It is a pleasure to resume my contribution on this Crown Minerals Amendment Bill, of course, which amends the Crown Minerals Act of 1991. I only got a minute or so into my stride last time, but I was actually responding to a previous contribution from Jonathan Young. I was reflecting on the irony that he referenced in his speech that there was an oil rig just turned up off the coast of Taranaki after months and months of dire warnings that we were banning oil and gas drilling. And lo and behold, here we were with an oil rig turning up right off the shores of the member’s own electorate, putting a lie to that particular premise.

I had been, in fact, so alarmed by the scaremongering of the National Party on that particular issue, I had been scared to get my car or to have my vehicle too far away from a petrol station just in case the country ran dry. But we are moving towards a just transition. Of course, in Mr Young’s electorate, the Provincial Growth Fund is investing in hydrogen. We know there’s a great deal of potential in that technology. In fact, I understand Budweiser are going to have all their trucks in the United States on hydrogen by 2020. So there are great strides being made in that alternative energy market and we are moving in that direction. As the Prime Minister referenced in her address, we are showing leadership in this regard.

Of course, that’s not to downgrade the importance of our oil and gas industry or minerals in general. Petroleum—we have $1.5 billion worth of petroleum exports, which generates $500 million annually for the Crown. The reason this bill is significant, even though it’s minor and technical changes, is the scale of this industry to New Zealand. The mining sector, for example, contributes $3 billion to New Zealand’s GDP or 1.3 percent, and we are a country that is rich in natural resources. I understand we are second only to the kingdom of Tonga in terms of natural resources per capita, and that’s why it’s important that we get the provisions within this Act right, because it is a significant part of our economy.

The petroleum—we’ve referenced. Gold, silver; coal is still a major mineral mined. There are, of course, massive phosphate deposits off the Chatham Rise, which are potentially brought into play at a future date. I was just in at Venture Southland the other day, actually, looking at their soil electromagnetic mapping, and there are deposits of uranium and thorium throughout Southland. Also, of course, more recently the Provincial Growth Fund has invested in facilitating a garnet mine just south of Hokitika in Westland. The Hon Paul Goldsmith in his contribution actually referenced the West Coast in regard to minerals and the Crown Minerals Act—and mining actually still contributes 40 percent of GDP. He was railing against the stewardship land issue in action on this side of the House.

Well, just the irony of that—after having had almost a decade to do something about it, the Opposition spokesman on regional development, based in that heartland of regional New Zealand, Epsom, has suddenly discovered the West Coast and the fact that 83 percent of their land is tied up in conservation department land. New Zealand First has been a firm advocate for looking at that land. There is some of it that is pristine conservation land, and we have to get that incorporated in our national parks, but there is also a considerable amount that is low-level scrub and very low-level conservation area at all. We need to be able to open that up for the likes of gold mining, etc., which this bill and the provisions in it will assist.

The bill itself gives the Minister new powers—powers to revoke permits. What we have in the oil and gas industry in particular is a system where when tier one companies get to a certain level with their wells, they onsell that permit to a second-tier explorer or company that then has specialists that have technology that can make more use of or optimise the resource that is left. Now, the danger, of course, in that is that if you get a cowboy operation that comes in that cannot fulfil its obligations, then that is a very bad space, indeed, to be in. We’ve seen the Rena—even though that was an oil spill off a ship, obviously, but we’ve seen the danger of having an environmental catastrophe like that if we do not get our regulations right and we do not have credible companies operating these permits. So these provisions within this bill give the Minister the power to revoke a permit if we believe that that company is not a credible custodian. Of course, it ups the fines to about $800,000 if those disclosure provisions are not met, which is, I think—given the potential for catastrophe—an appropriate level.

It also clarifies access to schedule 4 land—we know our pristine conservation land. Section 53(1) and section 53(3) actually directly contradict themselves, so this bill clarifies that issue. I’d just like to pay some tribute to the Economic Development, Science and Innovation Committee. During the process of that select committee, they did actually modify the bill somewhat. They came up with some good recommendations, and particularly around clarifying contracts around the existing settings for—so I’ve just lost my way there a little bit, sorry, with that provision. [Interruption] I only had one G and T at the British High Commission too, I might say. There was a certain—

ASSISTANT SPEAKER (Poto Williams): Order!

—provision in there around contracts that was clarified—and it has come back to me, Madam Assistant Speaker, which is good, and left me again as well. So I also just—

ASSISTANT SPEAKER (Poto Williams): I certainly hope the member is not trying to tell me he’s somewhat impaired.

No, no, I’m certainly not. It was just the one, but my notes are a little bit incomplete. So the select committee did play its role, I guess is the greater point that I’m trying to make. They did make some clarifications around those contracts. To the submitters, obviously, thank you for participating, and the officials, as always—we are always well served by officials in this Parliament in tidying up a bill, which I believe has wide support from the Parliament, including from New Zealand First. Thank you, Madam Assistant Speaker.

Madam Assistant Speaker—and I promise you I’m not impaired. I have not had a single drink. It’s a pleasure to rise to speak on this particular bill, the Crown Minerals Amendment Bill, in the third reading debate. I’d like to commend the member who just sat down, Mark Patterson. What an effort to actually break his speech up into two parts, one last night and one tonight, and to complete almost 10 minutes of a speech. I have to say that I wasn’t quite sure where he was actually sort of going with that.

Tim van de Molen: Neither was he.

Yeah. He probably wasn’t very sure. You know, often one of the things that actually happens, before I get to the bill—sorry, Madam Assistant Speaker. I just want to answer a comment that Dr Shane Reti actually said in terms of the $700,000 that this Government cannot afford for Northland children’s vaccinations for meningitis. I would say maybe the Government could actually take it off one of the advisory boards. I know for a fact that the broadcasting ministerial advisory board got $1.5 million, and there are only four people—

ASSISTANT SPEAKER (Poto Williams): And back to the third reading, please.

Thank you—and back to the third reading. I will. In the Crown Minerals Amendment Bill, the Minister of Energy and Resources actually got up in her third reading speech and said this: “[The] Government is committed to ensuring that the regulatory system that manages New Zealand’s Crown-owned minerals and the permitting regime that underpins these sectors is robust and fit for purpose.”—that sounds wonderful—“This bill seeks to clarify and update statutory provisions and [addresses] gaps, inconsistencies, and errors with the Act.”—that sounds very reasonable—“The changes in the bill will ensure that the identified regulatory gaps are closed, it will ensure that there is clarity for regulators and for the industry around permitting, and it will address inconsistencies in the Act.”

For that particular opening sentence that the Minister the Hon Dr Megan Woods said in the third reading, I completely agree, because National supports making minor changes to tidy up bits and pieces of the Crown Minerals Act 1991. We actually believe that these are, largely, small changes through the bill, although there is actually some financial beef to prosecute those who fail to notify the Minister of the change of control of a permit in the participant companies. For example, when a company has been given a licence to prospect and they decide that they’re going to sell their company, and they do not actually let the Minister know, and the licence goes to some unknown entity, for example—that is going to be a problem. I know for a fact that during the select committee process, there was actually a company that came into the Economic Development, Science and Innovation Committee and submitted that there is a process of changeover happening, and we actually gave it an exemption. I think that was a good thing that the select committee did.

One of the things that I thought about when Mr Mark Patterson was talking in terms of the energy sector—I was reflecting back on my childhood in Korea. Korea was a very poor country and actually relied very heavily on coal. There were many instances where I remembered as a child a coal mine collapsing and people being trapped. But the other thing that is actually very significant and in my memory is that coal miners from Korea actually left Korean shores when Korea was recovering from the Korean War. They were very, very poor. Korea was one of the poorest countries in the world, and the president at the time decided that he needed financial aid from other countries, and by exporting the experts who were actually in the coal mining field, as well as Korean nurses, to overseas countries—and one of the countries that actually took Korean coal miners was the Germans. The German settlement of Korean people began with Korean coal miners.

The reason why coal miners actually came into my mind was this whole thing about exploration. One of the things that this Government did in terms of minerals and the Crown Minerals Act and the other bill that we debated, and this one is also related, is in relation to the stopping of exploration in this country. What that actually means is that it has a major impact on an economy, for example, in New Plymouth. I think the mayor actually said it was a kick in the guts. The announcement by this Government was a kick in the guts and a decimation of an industry where people rely on work to actually earn a living to support their family, where people are actually working to feed their families and support their families to move ahead in this country.

They said one of the reasons why they were actually collapsing and kicking them in the guts was to have clean energy. The ironic thing is that in the first year of this Labour-led Government, they talked a big game. There was big talk about climate change and how New Zealand should be clean and green, and yet the results speak louder than words. The rhetoric that they gave out is actually false. New Zealand burnt the most coal in five years to keep the lights on. That’s right. It was the worst result ever—the most coal burnt in five years—because they were trying to keep the lights on. When you’re in a very cold winter environment, you need people to actually have energy so they can keep themselves warm, and we had a shortage, and they actually burnt more coal.

The other thing is talking about “clean” and “greenness”. I mean, a lot of people have talked about wind power and renewable energies, and I’ve actually spoken about this before. Do members actually realise that it takes 230 tonnes of coal for the steel that is actually required to make the turbines for windmills? It is ridiculous that in Parliament—apparently it needs 4.5 new wind farms a year. That’s what Dr Woods actually said: in order for them to progress, we need to create 4.5 new wind farms. What does that actually mean in terms of the coal that is required to make the steel to make the wind turbines? That means we actually use more coal. It’s not as green as the Minister actually seems to think it is.

In terms of the Crown minerals bill—I notice Madam Assistant Speaker is actually looking at me—the Crown Minerals Amendment Bill contains amendments, as I said, to the Crown Minerals Act 1991. It’s a technical bill. It’s not a major concern for the National Party, because we worked on it and we’re quite happy with it, and we support the bill. But one of the things that I’d like to remind this Government—this Labour Government fails to actually understand that every decision that they make has a major impact, perhaps on another industry as well. Earlier, I talked about a decision that the Government made in terms of foreign homeowners, preventing foreigners from buying a home. In this country, we have a shortage of 1,000 doctors. We can’t entice foreign doctors to come to this country because they are not allowed to buy homes. Somebody across the Chamber, over there, said that if they become residents, they can. Well, if they can’t work here and actually become residents, then they can’t. You know, they have to actually work here, and they can’t work here because they don’t want to work here when they can’t even buy a house.

This bill is technical. It’s a small amendment, and it actually makes a huge impact on the industry. I totally and utterly support this bill, but I give one warning to the members opposite: decimating Taranaki and decimating the oil and gas exploration industry is killing New Zealand families. It is actually provincial New Zealand. I mean, they say they care about the regions. They say they care about the regions, and Taranaki is one big region that earns a lot of money from oil and gas exploration—one of the richest regions in our country—and that Government, that party, destroyed it. I say go for it. You are making this country worse for the decisions you make—not you, Madam Assistant Speaker, but that Government.

Kia ora, Madam Assistant Speaker. Ngā mihi nui ki a koutou. Kia ora. The last member talked about people wanting to move to New Zealand. I know exactly why so many people want to move to New Zealand to work. We’ve got record low unemployment. We’ve got a Prime Minister who’s a bastion of positivity on the world stage in the age of Trump and Brexit. This beautiful country, which has got this great direction, that’s embracing the future and embracing innovation—no wonder so many people want to come to New Zealand, despite the relentless negativity of the National Party and that last member.

I’m proud to be part of a Government which has had the courage, the integrity of its convictions, the ability to listen to the clear clarion call of science, and the courage to set a leadership direction when it comes to the oil and gas exploration end and the start of the just transitions away from fossil fuels. That’s in contrast to the intellectual dishonesty of the National Party: the party who finally stopped denying the science of climate change but then did everything possible to encourage more mining, more drilling, and more fracking across New Zealand; the party who said that we would have to start to transition away from oil and gas, but the party never had the intellectual honesty to actually say when that would start; the party who continue to prop it up with more subsidies, tax breaks, and other actions.

ASSISTANT SPEAKER (Poto Williams): And back to the third reading, please. Thank you.

So I’m proud to stand here as this Parliament tonight does a tune-up of the Crown Minerals Act 1991 (CMA) that closes the loopholes. I raise these points because the last Government didn’t do this, didn’t do a tune up of the CMA to actually improve it, and didn’t close the loopholes that Parliament’s having to spend its time on now.

What we’re doing is two big things: a slight technical amendment and upgrading of the Crown Minerals Act—a bit of a spring clean, if you will. The big thing, though, is closing the loopholes. What we saw was that a change of permit operator needed ministerial consent under the existing regime, but that very same company could have its operations changed, could be bought out, could be sold, a foreign multinational could come in and purchase it, and that needed no ministerial control. It’s important that we close this loophole, because we’re at a time of considerable change in what I believe is a sunset industry—fossil fuels, oil, and gas. It’s a sector that’s seen huge change in New Zealand. Just in the last few years we’ve seen almost minuscule demand for oil block offers. We’ve seen Apache Corporation go, we’ve seen Petrobras go, we’ve seen the oddly named New Zealand Energy Corp—which is not New Zealand - owned—go, we’ve seen Shell go, and we see other operators come in and pick up the scraps left. What we’ve also seen as a trend as the fields are declining is a consolidation of ownership but also smaller companies coming in trying to tweak the last bit of oil out of it.

What we don’t want to see is cowboys operating in the New Zealand oil and gas sector. That’s why it’s important we close this loophole. But I do reiterate the point—it’s deeply disappointing that National, when they had the chance over nine years, didn’t close this loophole. In fact, what they did was throw tens of millions of dollars of tax breaks and subsidies to one of the wealthiest and most profitable industries in the world. They literally passed, under urgency, legislation to criminalise protest activity at sea. They hosted lavish conferences for oil executives. I remember when Phil Heatley spent $240,000 hosting just 10 executives for four days. It is a party that literally called out the navy on Te Whānau-a-Apanui as they tried to exercise their customary rights at sea. That was where National was focused on. What you’ve finally seen, I believe, is a separation of oil and State in New Zealand, which is great.

Now, for the submitters—there were only 11 submitters in the select committee process. It was a privilege to hear from them. Despite the technical amendments and the loopholes, there were some concerns from some submitters, particularly from the NGO and environmental sector, around some of the language in the legislation. I’m deeply proud that the bill has been clarified to assuage those concerns. The way the legislation was originally drafted legitimately could’ve given people the impression that existing permit activities could occur on adjacent land. I think that’s totally contrary to the principles of our Crown minerals regime, totally contrary to the issues of natural justice, that if someone has a permit on one farm, for example, they could apply the existing activities on the neighbouring farm. So what the committee has clarified is that that is not the case, despite the large number of submissions regarding that point. What it simply applies to is geophysical surveys. A point that I was deeply interested in picking up was, well, if we’re going to allow geophysical surveys on adjacent land, will this include seismic surveys, which have proved so controversial in Taranaki and so controversial overseas? These geophysical surveys will not apply in the adjacent land.

The second area it’s important to clarify for the submitters, which the committee dealt with and considered, was the issue of marine and coastal land. What could have been read by the initial drafting of the legislation was a legitimate concern that schedule 4 could be opened up. I remember marching—I was one of, I think, 50,000 people that marched down Queen Street in Auckland to protect our most precious conservation lands, the beautiful forests, the rivers that all Kiwis love, which was opened up for mining. The way the original bill in front of us could have been drafted could have opened up that prospect. What the legislation and the select committee made crystal clear, though, is that with new section 54A in clause 14, schedule 4 is only common marine and coastal area. We’re not opening up, and there’s no risk of opening up, this treasured conservation land; it’s simply only applying to activities at sea.

So we’re closing up some loopholes, we’re making some technical amendments, and there’s a bit of a tune-up. What’s the future? Now, I don’t believe mining is going to be New Zealand’s future. We’ve seen IT skyrocket into one of our top export industries. We’ve seen oil revenues slashed. We’ve seen oil companies leave New Zealand—hardly any interest in the oil blocks that the Government’s offered. What we’re seeing is a country and, I believe, a world that’s turning away from damaging and polluting fossil fuels.

I was heartened to read, just today, that every 25 minutes in New Zealand, a new solar system is installed on a Kiwi’s roof. Every month, a new megawatt of battery storage is added on to the New Zealand grid. Transpower, our national transmission provider, is forecasting 1.5 million Kiwi homes powered by the sun—the free energy. This is, I think, the important thing to put in context, right? All fossil fuels—the coal and the oil and the gas—are simply stored sunlight that fell on earth tens or hundreds of millions of years ago, in the age of the dinosaurs. Why on earth are we going through the middle man with these polluting fossil fuels when we could harness the power of the sun? In fact, one hour of sunlight that hits the world—one hour—would power all of the world’s economy for a year. That’s on a single hour of sunlight.

This is where we should be going, and, in fact, this is where international capital markets are going. This is where the investment community is going. The Bloomberg New Energy outlook says that we’re going to see $9.3 trillion spent on renewable energies in the coming year. We see internationally 100 gigawatts of solar installed last year—that’s 10 times the size of New Zealand, and this is just simply ramping up. I mean, just across my lifetime, the price of solar has dropped 99 percent, and it’s still going to drop by another quarter. So we don’t need to keep drilling for oil and gas or mining coal; the solutions are there.

There’s an old Chinese proverb, in fact, which is: when the wind blows, do you build walls or do you build windmills? This Government has set a clear direction, which is a just transition away from the old-fashioned sunset, polluting economy. We’re setting a new direction, towards the job-rich, the productive, the clean energy economy—a 100 percent renewable future. This is the clear direction, and I’m proud to be part of a Government which is promoting clean energy over polluting fossil fuels.

Thank you very much, Madam Assistant Speaker. Happy New Year to you and your fellow presiding officers and, indeed, all members of the House and the countless thousands of New Zealanders, no doubt, tuning in to hear what will be a second-rate speech about my first look on this, the third reading. I’m not particularly familiar with this as a subject matter, and at this stage of the legislative process, I do feel obliged to point out that I will still be more familiar than Mark Patterson clearly was. I think that after his explanation of his impairment, we’re only just waiting to hear him say, “I’m not as think as you drunk I am.”

In any case, moving on to my own speech on the matter, I note that in the spirit of a third reading, I will traverse as best I can the legislative history: the fact that the bill has come to the House, with support across the House, through the Economic Development, Science and Innovation Committee. It was subject to a number of recommended changes from that committee at the second reading, and those were thrashed out in some detail at that time. Accordingly, I just wish to pass reasonably quickly over each of those proposals and mark those off against the changes that were duly made in the committee of the whole House and that, indeed, have made their way into this, the third and final reading of the bill.

Before I do so, however, I might just note some of the general comments and aims that have been made about the bill by its sponsor—in effect, the Government, via the Hon Dr Megan Woods—essentially, of course, amending the Crown Minerals Act 1991 “to maintain the effectiveness and efficiency of the permitting regime”. “Effectiveness and efficiency” might sound a bit like a tautology, but I suppose we can say the effectiveness is that it works and the efficiency is how well it works. So, with that in mind, we can assess whether it’s done as it is claimed to be doing—and we think, on this side of the House, pretty well—in addressing duplication, gaps, errors, inconsistencies, and so forth. The aim, of course, is to ensure an appropriate permitting regime for the future, and that’s a relief, I suppose, to us all that an inappropriate permitting regime is not being proposed.

💬 Kieran McAnulty: This speech is a waste of time. This is just terrible.

So then, moving forward to the proposed amendments that came out of the select committee, there was an offence regarding change of control—“offence” having a technical term, and not meaning just that which Kieran McAnulty gives every time he opens his mouth. So it’s an offence as defined by the Act. That’s in the new section 41AB, as it will become, which is set out in clause 8. That’s talking about the way that the consent will be obtained for change of control, and, with your indulgence, Madam Assistant Speaker, I’ll take a bit of a closer look at that shortly.

But, maintaining a bit of a tiptoe through the tulips of the proposed amendments out of select committee, I note as well the specific way that late applications for a change of control would be considered. I think it’s helpful to think about not only the way that the Act, as it will be, once amended, should be complied with but also the consequences for non-compliance. If nothing else, that provides clarity in the event of non-compliance but also, I suppose, it sharpens the minds of those who might be careless as to their obligations so that they know that the legislators and the regulators and, indeed, the enforcers of those rules are serious about what it is that they are saying is required.

Next, we will look at the consent to change of control of permit operator, and exactly what that means for the Minister to be taking into account. It’s pretty prescriptive, but that’s in the name of clarity, and so we agree on this side of the House that that is a worthwhile thing.

Then the final one that I’ll note, leaving aside a number of minor and technical amendments, goes to clarification of the way that geophysical surveys would be authorised where adjacent land is concerned, because there is at least some potential for a lack of clarity in that and perhaps a gap that could be exploited if it were not addressed at this stage. So that’s talking about activity that would be authorised to occur on adjacent land, apart from a geophysical survey.

In my remaining time, I’ll just, as promised—or threatened—have a quick look at each of those various amendments that were proposed and that have found their way, more or less, into the final version of the legislation. First, we look at the meaning of “change of control of permit participant or guarantor”. So first, looking at the definition of “change of control”, there are a couple of different ways this can be achieved. One is by a person obtaining power, whether directly or indirectly, to control the exercise of, or to exercise themselves, 50 percent or more of voting rights in that corporate body. “Corporate body” is another little tautology there, but it is pretty good shorthand for any number of different types of entity that might be holding a permit or, indeed, guaranteeing its operation. A “specified person” is set out, and that’s significant because another part of what it might mean to have a change of control is that a person who is exercising voting rights in the corporate body might be involved and act jointly with them—so far, so good.

So what is the change of control itself? Well, that’s really where the power that’s being referred to—having just been defined and talked about as, essentially, a majority control—is made, and what’s needed, very clearly, in the Act is the prior consent of the Minister. So she or he, as the case may be, will be required to give consent—or, rather, not be required to give consent, but required to turn her or his mind to the question of consent—and we’ll come to the criteria that will be considered at that point. But set out very clearly, as I’ve advertised earlier, for the sake of clarity, and, again, no doubt to ensure compliance, are the various consequences that might come about if prior consent isn’t gained. One would be that the permit could be revoked, or, second, that an offence could be conducted under another existing section of the Act if the person knows or ought reasonably to have known—constructive knowledge, in other words—that the change of control would be effected.

So there’s a bit of technical detail around the way that a proposed change of control might be given. We’ll skip past that in the interests of time so that I can talk, really, before finishing up, about the application for a consent of change of control. So that will be made by a person in the way that’s set out there in some detail. Various key players would be a “director”, and the legislators—the drafters, probably; actually, more importantly—have in their wisdom relied on the definition of that term under the Financial Markets Conduct Act 2013, and a couple of other definitions relate to that one as well. Similarly, “stock exchange” is as defined in the Companies Act. So that seems, to me, a good approach—a sensible approach—whereby we’re not reinventing the wheel by stating who these various key players might be.

So the Minister, naturally enough, has the ability to require certain information. It makes sense, really, if you think about the decision that she or he would be making. Then, we look at a number of criteria under new section 41AE—alfa echo—whereby the consents really would be given if financial capability was held, such as that obligations under the permit would likely be met, whether there would be likely compliance with the work programme set out in the permit, and that obligations under the Act and elsewhere would be met as well. So, really, it is establishing that the permit holder would continue to be an appropriate person or entity to be able to carry out those obligations.

Finally, then, what would be the result of non-compliance? Well, I’ve touched on that earlier, and there’s more detail at new section 41AF in terms of the way that the permit could be revoked.

So I think that’s enough from me, or perhaps almost too much, one might say—an embarrassment of riches—but here we are in the new year and we’re all excited, I can tell, even more so now than we were 9½ minutes ago. So it is that I conclude by saying that on this side of the House, we’re very happy to be part of supporting what we think’s a good bit of legislation to tidy, update, clarify, reduce the duplication, and so forth, and we look forward to the bill’s passage very shortly.

Kia ora. I understand this is a split call. Marja Lubeck, you have five minutes.

Tēnā koe e Te Māngai o Te Whare. I would like to speak at this third reading of the Crown Minerals Amendment Bill. I applaud the previous speaker because I too am not intimately familiar with the material of this third reading subject, but, actually, listening to the previous speaker, I learnt a few more new things, so that is really good.

It is important, though, that I very clearly state my support that I will add to this bill, because it’s important for a Government and for the citizens of a country and for businesses to actually completely understand the rights and regulations that are applicable to them. This Crown Minerals Amendment Bill will provide modern clarity to what is the 1991 Crown Minerals Act to enable continued and effective regulation of the right to prospect for, explore for, and mine Crown minerals.

I’d like to thank Minister Woods for bringing this bill to the House, and I’ll also extend my thanks to the Environment Committee and the Economic Development, Science and Innovation Committee. They have recommended, by majority, that this bill should be passed with amendments, and these amendments have been carefully examined and presented in what the House feels is the most effective and clear way for this last reading. The support of those select committees—the Environment Committee and the Economic Development, Science and Innovation Committee—is very important going forward, especially when it comes to this country’s minerals. It’s very clear that our approach to industry and economic development needs to be carefully balanced along strong environmental standards to ensure that we have sustainable prosperity in New Zealand.

This Government has previously announced an end to permits for offshore drilling and an end to permits as we move towards achieving a greener approach to business. What this bill does is close loopholes that have allowed the transfer of permits in the current Crown Minerals Act. So the closing of those loopholes is another step in that journey towards that greener approach. What this will do is ensure transparency in economic activity that has a very significant effect on our environment.

So, like I said, I wasn’t part of the select committee doing the work on this particular bill and doing the mahi, but I did look at some of the submissions that had come in, and one in particular struck me as really coming to the nub of what this is about. That actual submission stated, “We support these loopholes being closed; it is a great concern to a community when a large company that has demonstrable financial capability sells to a smaller, lesser known entity, particularly one with limited financial resources, further, it is our understanding that a permit for most exploration/mining can only be granted to an entity that has specific proven resources, so the same should apply for the sale of said permit.” That was a submission by Protect Karangahake Inc., and it really highlights the need for these particular amendments.

Now, our Government has committed to a net zero emissions economy, and what these amendments do is they approach that transition period responsibly and they offer a sustainable regulation of Crown minerals going forward. This will ensure New Zealand’s petroleum and minerals industries are sustained responsibly and will maximise the benefits for the people of New Zealand. Therefore, I commend this bill to the House. Thank you.

Thank you very much, Madam Assistant Speaker. It is a great pleasure for me to stand here tonight, too, in support of this Crown Minerals Amendment Bill at its third reading. We here in the National Party, as you’ve probably gathered, are supporting this bill, and I thought I’d take the time to note the timetable of the passage of this bill. It was introduced, of course, and then referred to the Economic Development, Science and Innovation Committee on 5 April last year. It was read for the first time on 3 May, and here we are at the third reading—all within 10 months. So I congratulate the select committee on its efficiency in getting this bill through the House in such a speedy way, because if there’s one thing I get great satisfaction from, it is making improvements to legislation that specifically supports mining exploration in New Zealand.

Why wouldn’t we want to support an industry that is so beneficial to this country, employing around 4,000 Kiwis directly in the minerals industry, without the indirect jobs? And these are high-paying jobs. They earn, on average, over $100,000—almost twice the national average wage. Many of these jobs, as we know, will be supporting families and communities and regions that often don’t have the same job opportunities as they do in the cities. In areas such as the West Coast, the Coromandel, and Taranaki, mining plays a major role in underpinning their economies, and so ensuring that this legislative framework that they all work within is fit for purpose and that it adapts as is needed in the Crown Minerals Amendment Bill that we are discussing tonight is, I think, a really important factor. This is particularly relevant to the very special and mighty West Coast, where one study calculated recently that 40 percent of the region’s GDP is derived indirectly and directly from mining—mainly gold and coal. This means that that region can have relatively high household incomes for a very small footprint. There is no other land in this country that earns the same as mining.

I’d just like to explain, if I can, the scale of the mining footprint. On the West Coast, it is 14 square kilometres compared to the region’s 23,000 square kilometres. That’s 0.061 percent—not 1 percent, not 0.5 percent; it is six 100ths of a percent. So in terms of its scale, the mining footprint, for what it returns to this country, is extremely efficient. An Infometrics report last year identified the significant contribution of mining to the New Zealand economy, and I can say that the labour productivity of mining is $543,000 per full-time equivalent—that’s five times the New Zealand average. It’s a very high-value sector for New Zealand workers and their families, and the great part about it is that most of the revenue stays right here in this country. One major gold company here in this country told us that 88 percent of the company’s expenditure remained domestically, in terms of the businesses and the people that it engages.

The other interesting stat that I’d like to quote is that in 2018, the largest goods export from New Zealand to Australia was from gold.

💬 Dan Bidois: Get out of here!

Correct. We’ve heard a lot about “just transition”, and I can tell you that when we on the West Coast hear “just transition”, it translates to us as “abolition”. And, with no inhibition nor inquisition, what will result there is a reposition. And with no acquisition of ammunition, we’ll condemn that apparition to decomposition.

💬 Hon Carmel Sepuloni: She’s a rapper!

Ha, ha! If I just had the beats, I’d be good—you could do that, Minister. That would be a nice accompaniment to see us working together in such a close way. I commend the Crown Minerals Amendment Bill to this House.

Tēnā koe e Te Māngai o Te Whare. I spoke at the first reading of this bill, and now it is a pleasure to speak at the third reading of this bill. When I was speaking on the first version of this bill—no rapping here!—I characterised it as a “tidy-up” bill. It was a bill which tidied up the legislation, and the objective of the bill was to make sure that when oil fields and other mineral deposit fields were being tidied up at the end of their lives, it was being done in a responsible manner. In particular, there are firms that specialise in cleaning up the last of an oil field, but there are attendant risks in that activity, so we need to ensure that the firms that are doing it are actually capable of doing the work properly.

There was a loophole in the law that meant that if the shares in a firm changed hands, the Minister didn’t have anything to say about it and didn’t have any control over it. So what this particular piece of legislation does is ensure that if the control of a mining or drilling operation passes from one entity to another, then the Minister has oversight of it and the Minister can ensure that the job is done properly and responsibly, that any clean-up is properly allowed for, and that funds are available for the clean-up. It’s an important part of cleaning up after what is actually a mucky industry—a mucky industry that results in pollution; a mucky industry that results in slag, in oil spills, in leakage; a mucky industry that also results in greenhouse gases.

Now, it can be done—the mining can be done; the oil drilling can be done—in a responsible fashion. It can be done to ensure that there is very little environmental impact of the actual drilling, of the actual mining, and particularly if it is done where there are responsible operators. What cannot be done is getting rid of the climate change issues associated with the oil and gas industry and with mining for fossil fuels.

A large number of the speakers in the House this evening have talked about the changes to the oil and gas industry, and we’ve talked about the words being a “just transition”. I want to just talk a little bit more about what a just transition is. A just transition doesn’t mean carrying on with no change. A just transition doesn’t mean looking for new sources of greenhouse gases. A just transition doesn’t mean embracing every possible drop of oil there is. We actually need to make a start on exiting from the oil and gas industry. This is part of what this bill does. This bill helps in the tidy-up of fields, but let’s go a little bit further.

What I can tell the members of the Opposition is that not one single existing permit for oil exploration has been closed down. Not one single existing exploration programme has been stopped. In fact, exploration has continued in the area that is permitted for exploration, an area of sea that is the size of Te Ika-a-Māui—the size of Te Ika-a-Māui; the size of the North Island. That is the area that is still available for exploration, and this is exactly part of a just transition. There are decades for the existing industries to adapt. There are decades available for people to retrain. There are decades available for the new industries to arise. That is the transition that we are engaged in. It is a just and a fair transition, giving people time—time—to adapt and change, and it is very clearly signalled well in advance. That is what our just transition is about.

People need that time. They have it available to them. The scary thing is that our planet doesn’t have that time.

💬 Hon Member: How many years?

We’ve been told 12 years—12 years—if we are going to limit the increase in global temperatures to a mere 1.5 degrees above the pre-industrial temperature. That’s a serious change. It’s a serious change in global temperatures that underpins many of the weather disasters we’ve seen lately. On that side of the House, they want to hide their heads in the sand and not even engage in starting the just transition. We need to start. That is exactly what this bill is about.

This bill helps us engage in a just transition. It is part of this Government’s serious approach to climate change and to making the steps towards keeping this world liveable for all of us. We are showing leadership on climate change. We are showing leadership, and we are giving people in the oil and gas industry plenty of time. I commend this bill to the House.

Do we have a member to take the next call?

Yes, I am—my apologies. It’s my pleasure to rise and speak for the first time in 2019. It is a pleasure to see so many Ministers in the House this evening and a number of people, including the last speaker, who would like to be a Minister, I suspect. It’s a very warm welcome to you all.

Actually, this evening I was going to speak on what is a very technical bill that has cross-party support across this Parliament, and I’m still going to do that, but I can’t help but respond to some of the comments made by Deborah Russell just prior to me which are not really anything to do with this bill.

💬 Hon Carmel Sepuloni: Dr Deborah Russell.

She talks about—Dr Deborah Russell talks about transition and change. This bill is really around the regulatory processes, around the Crown Minerals Bill as was drafted in 1991. As my colleague Maureen Pugh has said, if you take aside oil and gas for a minute and just talk about minerals such as coal, gold, and the likes, then there are around 4,000 jobs—4,000 jobs—in this industry alone. What this bill and what this change does is to maintain the effectiveness and efficiency of the regulatory regime against the largest risk we pose in that space, and that is about the changes in permitting and the changes in company ownership over time.

Why is this House concerned about that? It’s concerned because there are obligations that go with those consents and those permits and the ministerial approval. We cannot have a situation where a corporate—large or small, international or Kiwi-owned—seeks to use a change in company ownership to somehow get them out of those obligations. I probably liken it to the most recent pretty significant failure, in a regulatory sense, and that was the leaky homes scenario. Effectively, what happened in the leaky homes scenario, everybody—builders went out of business deliberately to take themselves out of those obligations, insurance companies said they weren’t covered, and the agency that allowed a whole lot of those products on the market, the Government agency, said, “It’s not our fault.” And I remember at the time that local government ended up picking up a lot of that up.

In a simple sense, what this bill and this change seeks to do is to make sure that the obligations on those that get the permits, under the conditions they get, are carried through as was intended at the start. That’s really all this bill does. It provides that a person must get prior consent from the Minister before obtaining the power to exercise or control over 50 percent of that shareholding. Fundamentally, through the select committee process and through the submissions we’ve received, it was clear that there needed to be some stick in that equation. If you knowingly do something without ministerial consent, and you know you need ministerial consent under these clauses, then you create an offence—or even if you ought to reasonably know. That was a conversation that was held at the Economic Development, Science and Innovation Committee.

So there are processes set out for the change of control, and a person is not liable to conviction for an offence that relates to obtaining 50 percent or more power without the Minister’s prior approval while the application is being considered by the Minister, or if the Minister consents to the application. In other words, in the global market we operate in and in the fast-moving part of business, you cannot wait on ministerial approval, often, for changes in shareholding or control or investment decisions. So all you have to do under this clause is notify and start the process, and as long as you’ve started it, then generally you are immune from subsequent claims that you have known, because you’ve advised the Minister up front.

We heard in the select committee—a number of significant entities came and talked about the practicalities involved in changing ownership in the middle of some of these consenting processes. The select committee wisely said that we need to understand those implications. It was universally supported in the select committee, and I think it’s reflected in this legislation.

I also want to talk about what was a little bit more of a controversial issue, and that was the authorisation for a geophysical survey on adjacent land. In other words, if you have a permit and you have authorisation to undertake geophysical surveys on land subject to a permit relating to extraction, a company is allowed to get a permit to do geophysical surveys on adjacent land, but only that. So, in other words, there is a permitting regime for the survey, but a whole new permit would need to be applied on land next door. So, in our view, this is quite a simple piece of legislation. It’s nothing to do with a transition, as Dr Deborah Russell has said. It is simply changing some legislation to provide the people of New Zealand with some certainty for changes in corporate ownership and to make sure that the responsibilities and obligations that have been put in place at the time of those permits being issued are actually carried on with.

Some of the commentary we’ve heard from the other side—Mr Mark Patterson; a little part of his that actually made some sense to me was around his criticism of oil and gas and transition. Some members on the other side have talked about that. I respectfully say to them that that might be all very interesting. We strongly agree on this side with the approach, but it’s nothing as part of this bill.

So in the short time I have left, I just want to say that I congratulate the select committee on the work that was done; as Maureen Pugh has said to me, or said to this House, 10 months to get this through. It’s the first piece of legislation that I’ve observed as a member of Parliament go through the system, and the members of the committee across the board worked well to get the result we have. It’s a relatively simple piece of legislation, but I think this type of approach and the decisions and this third reading show what can be done when you have a sensible piece of legislation that is transitioned over a parliamentary term and that we end up all supporting.

So it was a little bit of a shame for me to hear tonight references to oil and gas and what this side of the House might think about some of those decisions, because they’re nothing to do with this. This is a very specific piece of legislation that we received very specific and detailed advice on from a significant number of players who operate in this industry. It’s not an easy industry to operate in. There is a lot of risk. The consenting is done very thoroughly, which means that there are significant obligations placed on the consent holders, and it’s this Parliament’s role to make sure that those obligations are carried out.

In closing, I just wish to thank members of the select committee for the work that was done, for the fact that it has been finally reflected in this third reading, and that after some 10 months, we have a very sound, sensible set of changes to a piece of legislation that was brought in in 1991, which actually looks after the people of New Zealand and the obligations that are set at the time of consenting. Thank you, Madam Assistant Speaker.

E Te Māngai o Te Whare, tēnā koe, otirā ngā mema o Te Whare nei, tēnā tātou katoa.

[Greetings, Madam Assistant Speaker, and indeed to all the members of this House, greetings to us all.]

Madam Assistant Speaker, happy New Year, and happy New Year to you all, colleagues in the House tonight. I’m very pleased to take a call on the third and final reading of the Crown Minerals Amendment Bill. Can I say how proud I am to belong to a coalition Government that has a commitment to reducing to a net zero emissions economy. I see this particular bill very much as part of our commitment as a nation to be leaders; to not just govern. We heard that from the Prime Minister yesterday: we can govern or we can lead.

I want to acknowledge the Hon Dr Megan Woods for bringing this bill in such a quick manner. I want to challenge the former speaker, the honourable member from Tukituki, around this being part of the just transition of this Government, because it very much is. Absolutely, it is around clarifying the statutory provisions within the Crown Minerals Act to give clarity, to ensure that it’s fit for purpose, and it’s actually up to date.

Previous speakers, including the Minister, have traversed the technicalities in the bill. I too want to acknowledge there are some changes in there that give rise to the Minister having oversight when permits may be changed between firms. But I too want to acknowledge the collegial way in which the Economic Development, Science and Innovation Committee both examined this bill, but also the change that they made to ensure that there is clarification in terms of the timing of when these provisions kick in and when they are going through the process of applying for permits themselves. So I want to acknowledge the work that the select committee did in bringing that change to the House during the committee stage.

The Minister did say, in the third and final reading, that this bill should be seen as a wider look at the Crown Minerals Act that she will be proposing later to ensure that it’s future-proofed going forward—and particularly her acknowledgment of engagement with iwi, which then reminds me of a story I just want to share with the House.

Prior to coming into Parliament, being the CEO of a large iwi group from the East Coast of the North Island, where we actually were asked to meet with a large oil company who came in to Hawke’s Bay, of course, our natural tikanga is to take these high-flying officials for kai. It was actually Statoil; 12 very senior executives flew in from Canada. We took them to a fine Hawke’s Bay restaurant called Vidal. We shouted them and showered them with the beautiful produce of Hawke’s Bay, not to mention the wine, and then we proceeded to have a discussion around their intention to come and explore for oil in the Hawke’s Bay area. Of course, while they were enjoying their fresh lunch and fine wine, we talked about the impact of things going wrong in this industry and the impact it would have in the region of Hawke’s Bay, given the value of both our horticulture and our wine. What we were doing with this particular oil company was to ensure that, yes, this Government wants to move this country to a net zero emissions economy, but it’s also about protecting what we already have.

We heard comments from that side of the House around Taranaki, for example, and the impact that Taranaki has on the local economy in Taranaki, but I was once in a meeting with the former Parliamentary Commissioner for the Environment Dr Jan Wright who actually said that the two coastal areas weren’t of the same geographical make up. And so it is really critical that when we are giving permits in a particular area, we actually do know the lay of the land, and so I am pleased that the Minister of Energy and Resources has the oversight in this bill to ensure not only that those that are receiving the permits but the environmental considerations are part of that decision-making process. That’s what I believe this bill will enable the Minister to do.

So it is important that we have a futureproofed piece of legislation that governs our Crown minerals. I am excited that the Minister is going to look at a wider review of this particular Act and the role that iwi play in it. There are certain iwi that have got Treaty claims around their own minerals within their own catchment and, hopefully, that will be, I guess, explored when the Minister looks further at this Act. But it is a simple piece of legislation that we are debating and passing in this House, and, like former speakers, the way in which the select committee but also the pace in which the Minister has brought it here absolutely shows how committed this side of the House is to moving us into an economy that is more sustainable—regionally, economically, socially, environmentally—for this nation. It is a piece of legislation I’m very proud to support, and I commend it to the House.

Bill read a third time.