Maritime Transport (Offshore Installations) Amendment Bill

I move, That the Maritime Transport (Offshore Installations) Amendment Bill be now read a first time. I nominate the Transport and Infrastructure Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 29 October 2019, and that the committee have the authority to meet at any time while the House is sitting except during oral questions and during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, and to meet outside the Wellington area during a sitting of the House, despite Standing Orders 181, 193, 194(1)(b) and (c).

This bill seeks to clarify and strengthen requirements on owners of offshore oil and gas installations to support increased levels of insurance or other financial assurance for their liabilities in the event of pollution resulting from an oil spill. Although the likelihood of a major marine spill is low, the environmental, financial, and cultural impacts of such an incident would be significant. Protecting our environment is hugely important for our nation and safeguards our economy and our future. As a nation, we’ve built our economy and reputation on our natural capital; tourism and agriculture are two of our biggest export earners as a result. New Zealand’s natural capital is of enormous value—immeasurable, I would argue. Our forests, our fresh water, our soil, our birdlife, our enormous marine area, our fish stocks, our atmosphere, and our biodiversity—these are taonga which have underpinned our way of life and our standard of living. However, these taonga cannot be taken for granted and must be protected for generations to come.

The level of financial assurance required for owners of offshore oil and gas installations needs to better reflect the real-world cost of implementing clean-up measures in the event of an oil spill in our waters. To enable this, the bill amends the Maritime Transport Act 1994. Amongst other things, its purpose is to clarify the requirements on owners of offshore oil and gas installations to hold insurance or other financial security in relation to their liability for clean-up and compensation resulting from an oil spill. The Maritime Transport Act implements a “polluter pays” regime, under which owners have unlimited liability for the cost of pollution damage resulting from a spill at their facilities in New Zealand waters. This means that anyone affected by oil damage from an offshore installation is entitled to make a claim against the owner. The owner’s liability includes the cost of measures to prevent or reduce pollution damage, the cost of reasonable measures to reinstate the environment, and the loss of profit from impairment to the environment.

The bill I’m speaking to today does not change the owner’s liability. Instead, it strengthens and clarifies the requirement for insurance and other financial security that owners must hold. The Act provides for owners to hold insurance or other financial security in respect of their liability. The insurance or other financial security is intended to mitigate the financial risk to the Crown and other parties, should the owner be unable to meet their liabilities in the event of a significant oil spill. Detailed requirements for the insurance or other financial security are specified in marine protection rules made under the Act. The bill amends the Act to provide certainty in relation to the liability of insurers or, in the case of financial security, to the persons providing financial security to the Crown and to other third parties who are affected by the pollution. The bill also clarifies that rules may specify the types of liability that will need to be insured against, and may provide for the insurance or other financial security to cover the cost of well control measures and other costs of implementing marine oil spill contingency plans.

The amendments to the Act will be supported by amendments to the relevant rules, which will specify the detailed requirements relating to the insurance or financial security. The rules will include a scaled framework for specifying the amount of cover required, based on the modelling of a credible worst-case scenario event from that particular installation. Maritime New Zealand will also issue guidance for applicants to help them to navigate the regime. I have publicly released working drafts of the guidance and marine protection rules that are proposed to be put in place following the passage of the bill. I have done this so that the public and stakeholders are able to understand how the new regime will work as a package. It will also ensure that the new regime is able to be implemented as soon as practicable if the bill is passed into law.

These changes are intended to enable owners of regulated offshore installations to meet the Act’s requirement using insurance policies that are consistent with internationally available best-practice policy wording and are available on the international market. These policies will be required to cover the key risks and costs of clean-up and pollution damage associated with the owner’s installation.

I’d just like to thank all of the officials who’ve been working behind the scenes for quite some time to bring this bill and the associated rules before the House. I commend this bill to the House.

Thank you, sir. I’m pleased to stand in support of this bill. This bill was prepared—and I’m pleased the Minister has continued on with that work—by the Hon Simon Bridges in his role in the transport portfolio. We see it as sensible and necessary, and we certainly do support not only world’s best practice in terms of any exploration that happens offshore but also ensuring that those companies who have the privilege to operate within our jurisdiction also carry the financial ability to put right anything that does occur. We’re very happy, in that regard, to add our support to this.

We do note that the Minister has doubled the upper limit cap of the regime that was put forward by the previous Government, but looking at the scaled framework that is in the notes, we see that, essentially, the Minister has added three further areas. In her press release, she is saying that the proposed upper limit has been set at $1.2 billion, instead of $600 million, to futureproof the regime in the event that a future installation proceeds at a higher-risk deep-water location. We do understand that there are different elements of risk according to the hydrocarbon that is being explored for or produced, and also there are different elements of risk regarding which side of New Zealand that you are exploring from because of prevailing weather. So our pre-election Cabinet paper recommended a scaled framework of a maximum of $600 million, but I’m sure as the bill goes through the select committee process, the members of the committee will be able to investigate and hear the rationale behind what the Minister has proposed.

Certainly, I think that as long as there is the ability for companies, as the Minister has just said, to be able to access the insurance product—the policies that are consistent with internationally available best-practice policy wording, a very precise and concise set of documents that is available on the international market—and as long as that is available and we do not see any limitations around this upper limit regarding those, I believe that this will be a way forward. We would be keen to hear from the Minister at some point in time; just her rationale.

When we look at the scaled framework and see what components make up that higher level, it’s interesting that it’s based on whether it’s gas, dry gas, or whether it’s any other type of hydrocarbon, whether that’s crude or condensate. It’s also based on the volume of what that liquid may be that reaches the shore. The limit that we had put in the previous bill, or the workings of it, was up to a maximum of 200,000, and she has taken it over 200,000; she’s taken it to over 280,000. Also, the total length of shoreline that may be affected by any sort of incident being 1,200 kilometres or more—that in itself has the highest number of points. So there’s a very simple scaled framework which people can download on the Ministry of Business, Innovation and Employment website and investigate that and see where they would sit.

We do note that particularly in Taranaki, where all the offshore installations currently are, there is a range of insurance cover already in place, from $170 million right through to about $390 million. So this is a practice that is already put in place, but what the Minister is doing now is lifting that upper limit for those sorts of occurrences that may occur.

We believe that oil spill contingency plans are already part of the plans and the permitting regime that operators have to comply with and satisfy New Zealand Petroleum and Minerals, and that the party responsible for the stopping of the release of oil must demonstrate they have prepared for all spill scenarios and have access to equipment and have financial means to contain a spill at its source. All of that is put in place before the permit is even granted. So what this bill is essentially doing is now putting in place the financial assurance that if those aspects are ever needed to be put in place, the financial ability for that to occur is present.

Like other members of the House, we believe that we have very good operators here in New Zealand. All exploration and production does carry a degree of risk. However, oil spills are extremely rare. New Zealand has never experienced a significant oil spill from an offshore installation. The largest was a 23 tonne spill from the Umuroa floating process ship off the Taranaki coast back in 2007, when an offtake ship, a vessel, was offloading and the umbilical pipeline became unattached for a short period of time. From that, a 13 kilometre stretch of beach off the Taranaki coast was temporarily affected by this spill. That’s the only account in 60 years of offshore operations. So we are thankful that we have world’s best practice. We have companies that pursue world’s very best in terms of health and safety not only for their own people who work on these installations but also for our environment—the environment which we appreciate as being pristine and must be cared for.

So we very much support the intent of this bill. As I said, there’ll be some questions we ask at select committee, and I’m sure that we can find those answers from officials. There’ll be others, no doubt, who will submit and seek answers as well. I do commend this bill to the House. Thank you.

Thank you, Mr Speaker. It’s a pleasure to stand here and make a contribution on the Maritime Transport (Offshore Installations) Amendment Bill, first reading, and support the work of my colleague Associate Minister of Transport Julie Anne Genter in bringing this bill to the House. This is a Government that is committed to tackling the difficult, long-term challenges that New Zealand faces. Last year, the Government announced an end to new offshore oil and gas permits while allowing existing permits to run their course and for those operators to continue operating. We took that action as a way of confronting climate change and managing a just transition to a low-carbon economy, and this bill is part of our very deliberate, planned, and managed transition that we are making to ensure that the risks of a spill from oil and gas operations are well managed and properly mitigated.

We know, and I think this House agrees, going by the comments from the previous speaker, Jonathan Young, that the current requirement for operators to hold insurance of just $27 million is way too low. It’s a piece of regulation from another age, and the modelling shows that the cost of an oil spill in New Zealand could be, in the worst-case scenario, in the order of hundreds of millions of dollars. It’s not so long since we saw the grounding of the Rena and the spilling of oil into the Bay of Plenty. We saw the very real effects of an oil spill offshore on our treasured marine ecosystem, and the thing that left such a bad taste, I think, in the mouths of the communities that were affected by the Rena spill was that taxpayers and local communities were utterly exposed in that instance and left to foot the bill for the clean-up—

💬 Jonathan Young: But that’s not the same as an oil installation. It’s not the same. Ships are not the same as oil installations.

—a completely unsatisfactory situation. That experience is raw in the memory. Whether it’s a ship or whether it’s an offshore installation, Mr Young, the effect is potentially the same on the ecosystem and the biodiversity and the lives of so many New Zealanders who live on, and daily rely, on our coastlines.

It’s only fair—and this is the principle that underlines this bill—that those who profit from oil and gas exploration are able to cover the clean-up costs of an oil spill in the event of that happening, and particularly in the event of a worst-case scenario.

The bill aims to strike a fair deal both for New Zealanders and the oil and gas industry. It requires operators to hold insurance scaled to the risk that their installations pose. This bill and the accompanying rules will ensure that the major costs of a worst-case scenario oil spill, the clean-up and the well control measures, are properly insured against.

Now, I said that it aims to strike a balance, and the reason it has to strike a balance is that, obviously, you want to protect communities and the taxpayer against having to pick up the costs of a spill from an offshore installation, but it’s also important to ensure that this regime is insurable on the international market. We are right now experiencing the difficulties of an international reinsurance market that, in the wake of various seismic events in this country in recent years, sees this country as challenging, in that respect.

The bill also addresses concerns raised by industry about the insurability of the regime that was first developed under the previous National Government. It clarifies that operators rather than the insurers hold unlimited liability for the cost of the clean-up and pollution damage associated with an oil spill. So it’s the operators who are responsible for that unlimited liability. It also clarifies that marine protection rules may specify the types of liability that will need to be insured against, and allow for insurance to cover the cost of well control measures in the event of a well blowout.

People will also remember the blowout in an oil well in the Gulf of Mexico, one of the worst marine disasters associated with the international offshore drilling industry. People saw the massive ecological damage and the immense difficulty of capping that well and limiting the damage. I think that the former Government, in the rules that it drafted prior to the last election, basically, looked at setting the limit—the proposed upper limit in the rules that they were considering was $600 million. The advice from the officials that led to that upper limit being doubled was that the $600 million upper limit simply would not have futureproofed this regulatory regime against the risk posed of a large deep-sea installation operating in New Zealand waters. Now, currently there aren’t any, but it’s quite possible that they will be, and so this regime—

💬 Jonathan Young: How is that going to happen?

Because there are current permits that are allowed to run their course for the next, what, 25 years. So that’s what this change is insuring against. Anyone who watched the unfolding of the disaster in the Gulf of Mexico will know that a $600 million limit is simply not enough to deal with the effects of a spill at scale on an offshore installation.

So there is risk modelling for all of the existing operations, and I think that the modelling that’s been provided indicates that the upper limit for the current installations in Taranaki would be between $170 million and $360 million for the existing operations in Taranaki. So you can see that’s the scale of it.

The bill also, as well as providing the basis for regulations to be set by Order in Council, changes the—it’s not just a regulatory change; it also changes the Maritime Transport Act of 1994, and that’s necessary in order to bring in the new rules that provide the new settings.

So that’s it. I look forward to seeing what the select committee comes up with. I’m sure the risk modelling for the different kinds of installations will be worked through in detail, and there’ll be plenty of time to question and scrutinise those. Thank you.

Thank you, Mr Speaker. It’s a wonderful opportunity to take a call in the first reading of this Maritime Transport (Offshore Installations) Amendment Bill. The National Party stands in favour of this bill. It’s taken a wee while to get here, and it’s all about, basically, an insurance premium for these companies to have to hold, which makes good, logical sense, and lifting that upper level.

Reading the bill, I was thinking back to the Rena shipwreck that occurred on 5 October in 2011. While that isn’t an offshore installation, certainly what played out meant that a lot of that very heavy machine oil ended up on the coast and had a big impact on the Bay of Plenty. In fact, I was the associate transport Minister at the time and Steven Joyce was the Minister, so I was dispatched on a regular basis to go up and check in on how the recovery was going on the Rena. Nick Smith, the Minister at the time—he described it as the worst maritime environment disaster in our recollection of this fine country of ours. Certainly, it was a massive event, and the clean-up took a long period of time.

I happened to be a duty Minister in the summer that followed. For those on the other side of the Treasury benches that have been Ministers over the summer break, they will probably run a similar scenario to what we did, so that everyone could have a break. So I happened to be the duty Minister, would you believe, when the Rena broke in two. That created quite a bit of a frenzy, that occurred on the 9th of the 1st 2012. The reason I tell you that story is that it’s always important, when legislation goes through this place, to talk about life experiences—and that was a live experience for New Zealanders, particularly for the Bay of Plenty, to have to deal with the aftermath of the Rena, something that impacted in the vicinity of about 20,000 seabirds—and, in fact, 2,000 seabirds were estimated to have been killed. I went and visited the great work that Massey University were doing cleaning up these seabirds that had been rescued that had, effectively, been caught up in this terrible waste oil.

So this bill that we are debating, this evening, that the National Party supports, is very important. It basically says that owners should hold the necessary insurance. Those people listening, out there on a Tuesday night at 9.30, will think that this is a good, pragmatic bill. The National Party supports it.

Kia ora, Mr Speaker. It’s a pleasure to follow, in a collegial fashion, the shadow spokesman for agriculture, Nathan Guy, and that little journey down memory lane about Mōtītī Island and the surrounding environs.

Naturally, we support this bill. We support this bill because we think it’s a reasonable impost that should be placed upon a global industry that from time to time will come to New Zealand either as carriers of oil or, in my case, as fellow enthusiasts for the extraction of oil, to the extent that we have accessible oilfields in New Zealand.

Often, there is a debate as to where do you draw the line between what is rightfully the private responsibility of people who hope to profit from extracting resources out of our environment, and that which remains the residual responsibility of the State. The reason I raise that distinction is to ensure that we do what is right and proper by our people, but that we also don’t close the door to those with access to foreign capital who either provide us with essential services—i.e., the continual access to the oil that we require—or who want to develop, with New Zealanders, the natural resources of our country.

I also recall where I was when Nathan Guy, during that balmy summer, was checking his cows for bloat—

💬 Hon Nathan Guy: Normally the spring.

He milks all the way round the year; he’s got so many farms, although they may decrease if the four-lane highway continues along—oh no, Mr Twyford is here, there’ll be no more four-lane highways in that direction for the foreseeable future; maybe a token improved highway south of Whangarei. Of course, our attention is dedicated to rail but that’s all going to be electrical, so I’ll come back to the topic at hand.

So I do recall where I was. But I also recall the utter confusion as to how did it happen, who was responsible, the quite lurid stories as to what would have possessed the Filipino captain, as I recall, to be celebrating a birthday and who was actually with him when he celebrated their birthday—of course, that led to all sorts of lurid explanations from the fishing industry that don’t deserve to be shared in this particular segment of the evening or in the House. But I do recall also, it being an absolute shock to the people from Mōtītī Island. They were engulfed in it. It was bigger than Ben-Hur. Sadly, it didn’t end well for a lot of those people, partly because they felt dislocated in terms of what the State was doing and partly because they felt that the insurers standing behind, if I’m not mistaken, the Greek owners, in that particular episode, played hardball. But whilst the litigation and the politics got more and more robust, the environment suffered. I didn’t have the pleasure to actually go and visit the patient souls saving the seabirds, but I actually went out on a fishing-boat and had a good look around in that particular area.

So it’s right and proper that we sheet home the responsibilities where they belong, but do it in such a way that people realise that we’re still open for business. That’s not to compromise the standards that the public expect us to adhere to in relation to environmental management; it’s just assuring people that come to New Zealand that we’re not some frontier where they can take advantage of us. We’re a sophisticated, modern economy and our people have very modern expectations as to who should be held responsible.

Therefore, we support, and I echo, some of the sentiments by Mr Guy and the speech shared initially by Mr Twyford. So we look forward to the entire process, and we identify the need to have balance, but also to compromise not one inch should we continue to suffer the sad lessons of Rena and our environment suffers. Thank you very much, Mr Speaker.

Thank you, Mr Speaker. Isn’t it a lovely night when we can all agree, on this Tuesday evening? I too rise in support of this Maritime Transport (Offshore Installations) Amendment Bill in its first reading. I would like to echo the sentiment that our marine environment is incredibly special, that our ecosystems here are some of the most precious in the world, and that our indigenous marine species are some of the rarest. The other thing is that New Zealanders have a very innate connection with our marine environment—and certainly, with respect to the contributions already given, that is highlighted by the devastation caused, and the public outcry, with respect to the Rena disaster. We want to make sure that that sort of oil spill never occurs again. So this bill certainly goes toward that—strengthening the requirements of owners of offshore oil and gas installations to hold appropriate financial securities and raising the framework in the upper limit to $1.2 billion.

Look, I do note—and of course the National Party don’t have monopolies on good ideas—that this bill sprung out of a Cabinet paper that was designed while the National Party was leading the Government. So it is this new Government, the Labour-led and New Zealand First-led Government, that has taken this National Party bill, reframed it, and introduced it to the House now two years after that review was complete.

As my colleague Mr Jonathan Young has said, originally the framework was up to $600 million, and has been raised, without detail, to $1.2 billion. So questions will have to be asked in the select committee with respect to the raising of that limit. But regardless, this side of the House stands in unity that we believe that our marine ecosystem does require protection. It does require a framework that if there is an oil spill and a disaster, the company should take that liability and clean up that work.

But in conclusion, it’s not all about evil profiteering of oil and gas installations and providers. They are in partnership with the Crown. It should be mentioned that they are responsible operators as well. I understand from Mr Young that Todd Energy sponsor many community events in the Taranaki region, including looking after and funding the New Plymouth aquatic centre. So, look, it’s not all about dirty corporates; it’s about a partnership. It’s about putting a framework in place that does protect our marine ecosystem, and being responsible all round with respect to our environment and energy, moving forward. For that reason, I support this bill.

Thank you, Mr Speaker. It’s a pleasure to take a call on this, the Maritime Transport (Offshore Installations) Amendment Bill. Can I acknowledge the transport Minister, Phil Twyford and the associate Minister who was here, Julie Anne Genter, for leading this work.

It’s been good to hear the memories that people have of the incident of the MV Rena back in 2011. I have similar memories of just seeing what has been termed the worst maritime disaster, and for me it was really seeing the volunteers who were helping to clean up, the local people of Tauranga and the Bay of Plenty region who really dropped everything that they were doing and got themselves down to the beach, literally, to see what had happened.

But very soon, we saw the outcome of the incident, the accident where I’m told that over 300 tonnes of oil spilled. Then we started seeing the impacts on the local environmental conditions, the marine life. For me, it was an education lesson looking at the TV screens from Wellington, 700 kilometres away, and to see this 38,000 tonne ship that was beached, literally, but also the impacts that came off from that: first, the oil, then the containers, and then—I guess—the inquiry into who was responsible, how it happened, what the impact was, and really the ramifications from there.

I sit on the Transport and Infrastructure Committee. I’m looking forward to taking this piece of work through that process and hearing from those who never ever want this to ever—ever—happen again. Interestingly, you only need to do a small bit of research to see that this is really nothing if you compared it to the accident that would await us if there was a deep-sea drilling issue. So it’s good that this is being looked at now, and some of those costs associated with deep-sea drilling would have a clean-up far higher than the $500 million to $600 million that was linked to the Rena. So it is timely, and I am looking forward to working through the process here.

So as we’ve heard, look, it really amends the maritime protection rules, and that will see the increase of the required level assurance up to a maximum of $1.2 billion. I think when you look back at the costs and the implications on those wanting to do this activity, that’s a good amount. It’s far in excess of the $27 million that operators currently have to hold at the moment. It’s such a big gap that I think, “Wow. Why hasn’t this been looked at earlier? How come it’s taken an accident to ensure that costs are covered if such an incident takes place?” We’ve waited for the accident to take place and now we’re scrambling around. But in this case, we’ve been proactive in terms of making sure that there’s a change in legislation to ensure that those costs don’t come back to the poor old taxpayer but they are apportioned to the operator, who, as the Hon Shane Jones has said, if they’re taking resources then they’re certainly paying for any issues that come with that activity.

I want to acknowledge, though, and it has been said, that the previous Government initiated this work. Good on you. But this Government has chosen to consult on a higher limit, that $1.2 billion limit, and that’s been modelled to ensure that those costs are covered. So I’m hoping that the select committee process will provide us feedback that that is the right way to go. I know and am confident, from people I’ve talked to, that it feels that it’s about right and we’ll get a positive outcome from the process.

I am excited by what this brings. Some people may be excited by another one of these disasters. I certainly don’t want one to happen, and I know that this will provide the necessary legislation to ensure it never ever happens again. I commend this to the House.

Thank you, Mr Speaker. It’s a privilege to rise and take a late evening call on such an exciting piece of legislation going through the House. The first reading of the Maritime Transport (Offshore Installations) Amendment Bill—this is fantastic. It’s great to see another fine piece of legislation, drafted under the previous Government, finally coming to fruition now under this Government. I’m sure they’re grateful of the constant pipeline of work we had lined up for them that they are able to roll out. We hear constantly about how there’s more and more work in the pipeline, but they’re doing a great job of hiding it from us. It’s great to see this one coming through.

I would just like to echo the comments from a previous member on our side, Sarah Dowie, when she made reference to the special nature of our marine environment. I think that’s something all New Zealanders can relate to; it is, indeed, special. That’s certainly why, under the previous Government, we set up 11 new marine reserves—more than any other Government.

💬 Agnes Loheni: How many?

11 new marine reserves under the previous Government; a fine thing indeed, to protect what is such an important part of our environment here in New Zealand. I’m sure the current Government would like to continue doing work in that space, and I’d like to suggest perhaps they start with the Kermadec Ocean Sanctuary. Perhaps Mr Shaw might like to give some thought on that.

So here we are with this particular piece of legislation, looking to put some controls and measures in place around minimising the likelihood of an oil spill or an incident and then the subsequent impact of that. It’s about getting the balance, though, between the risk of that impact occurring and what that impact would be, as well as then the cost to mitigate that potential impact and the implications that cost would have on business.

Now, this Government has never shied away from the opportunity to charge much more than is needed of any business or any individual. Obviously, we’ve seen that here when previous recommendations have suggested a cap of $600 million is an appropriate level of assurance required under this legislation, and the Government’s doubled it. Hey, if they can charge more, why not?—seems to be the general theme. Of course, we want to minimise any risks, and the Rena example has been bought up several times. Actually, I’d just like to acknowledge not only the volunteers that helped out with that but also the Defence Force, that played a significant role in that clean-up exercise as well. These sorts of things are very passionately supported by Kiwis because of that passion I mentioned earlier about the environment, and the marine environment in particular.

So we need to get that level of protection in place, but, at the same time, we need to be ensuring that we’re not unduly impacting or imposing significantly higher costs that are unwarranted, in terms of the risk versus the cost to offset that risk on businesses who are participating in this industry. Of course, we know the Government’s looking to ban—or has banned—all future oil and gas exploration. Indeed, it seems they’d rather the industry didn’t exist at all and, perhaps, this is a surreptitious way to try and influence that ongoing change in that space. But we certainly support having some rules in place, and we feel the original $600 million amount was an appropriate level. So it’ll be interesting to see that canvassed at select committee, in terms of the reasoning around a potential change and whether, indeed, that is necessary.

So, look, we certainly support progressing this through—as I mentioned, drafted under the previous Government—and look forward to seeing the developments through select committee and beyond. So I commend it to the House. Thank you.

This is a split call. I call Priyanca Radhakrishnan—five minutes.

Thank you, Mr Speaker. It’s with pleasure that I rise to take a short call on the Maritime Transport (Offshore Installations) Amendment Bill. Now, a couple of members before me have reminisced about the Rena oil spill and, funnily enough, when I was considering this bill, that’s the oil spill that I thought about as well—1,700 tonnes of heavy oil, 200 tonnes of diesel, and we all remember the amount of time that it took to clear up that oil spill, the amount of sand that it was going to take, and the environmental impact as well: spotted dotterels, and there were 25 other native birds that were quite badly affected. Actually, there were about 2,000 seabirds that died and 20,000 others that were affected, and there were little jumpers and sweaters that locals made to keep some of those birds safe from the oil spill, as well.

Of course, the cost of the clean-up of the oil spills has been modelled, and the modelling shows us that the cost of an oil spill in New Zealand could actually be in the hundreds of millions, or even billions, in the worst-case scenario. That’s why this bill amends the Maritime Transport Act 1994—really, to clarify and strengthen the requirements on owners of offshore oil and gas installations to have the insurance or other financial security in relation to their liability for clean-up and compensation resulting from an oil spill. So it also clarifies that the onus lies with operators, rather than with insurers, to hold unlimited liability for the cost of clean-up.

Actually, I thought I’d just refer to a point made by Tim van de Molen, the member who has just resumed his seat, who talked about something about this Government and its surreptitious way to ensure that the industry doesn’t exist at all—or something to that effect—about oil and gas, which is absolutely untrue. This is part of the Government’s plan to confront climate change and manage a just transition to a low-carbon economy. It’s actually part of that deliberate, planned, and managed transition to a low-carbon economy that this Government is making sure that the risks of spills from oil and gas operations are mitigated in a way that is sustainable as well.

Just to go back to the bill, as I mentioned, it clarifies. It also aims to strike the right balance between creating a regime that insulates taxpayers and communities against the majority of oil spill - related costs and ensuring on the other hand that we have a regime that is insurable on the international market. This is a bill that goes a little bit further to ensure that those potentially high costs of an oil spill can be mitigated. I commend this bill to the House.

I call Alastair Scott—five minutes.

Thank you, Mr Speaker. It is a pleasure to rise in support of the Maritime Transport (Offshore Installations) Amendment Bill. We’ve heard that it amends the 1994 Act—quite a long time ago, so I’m sure this is not the first amendment to that Act, but it is good that the Act is continuing to evolve and improve. Of course, the initiative that we’re talking about today is on the back of a National Government. The work was done in the last Government. It’s good to see the current Government continuing with the good work kicked off by Simon Bridges as Minister of Transport at the time.

A lot of people have been talking about the Rena and oil spills, and I was thinking of the Mikhail Lermontov breaking into the Marlborough Sounds as another example of a shipping disaster that could have been a bigger environmental issue than it was. It’s actually turned out to be quite a boon because it’s turned into a diving and recreational attraction. People from all around the country and all around the world, I imagine, go there to dive at this particular site. Not that we’d want to have more of these sites—not that we’d want to have more of these sites. We don’t want to have ships crashing into rocks just so that people can dive and explore.

In fact, while there’s a whole lot of issues around the safety and the ability and the competence of the captains at the time of both the Rena and the Mikhail Lermontov, this bill—believe it or not, having heard all the speeches and discussions so far—is not about ships. It has nothing to do with ships or the liability of ships crashing into a rock. This has to do with oil exploration and the spills of an offshore installation.

So ships have a different liability regime, but it’s interesting that we’ve been talking for the last little while about the Rena particularly. Now, this deals with oil exploration and the exploration and the installations that are involved in that, and the liability of those entities is unlimited. Today, it is unlimited, and after this bill amends the Act, they will continue to be in an unlimited liability situation, but it does clarify the type of insurance that the agent must carry out, and there’s going to be some modelling.

Minister Twyford mentioned the discussion that he will find interesting, and I will too, around that type of modelling and the aspects of risk that a type of installation will have. That will depend on, for example, whether it’s on the West Coast of the South Island compared to the calm waters of the Bay of Plenty. Those types of things, I’m sure, will be discussed, and that will change the risk, change the premium, and change the obligation of the oil exploration, oil installation entity. At the end of the day, the bill will clarify some of those things so that that the agents or the entities are not paying too much for insurance, so that it’s very clear to them what they’re paying for because, as it’s been mentioned before, we don’t want to put investors off, we don’t want to put explorers off from coming to New Zealand, because it is important that we continue to carry out that work.

It is a good bill—as I say, It’s kicked off from the previous Government. It seems to me to be quite a technical bill in the ways that the modelling particularly might result in some good discussions, and I am looking forward to those discussions, depending particularly if Minister Twyford—I don’t know; he might even turn up and discuss it if he’s interested. So I look forward to those discussions and I commend the bill to the House.

The previous speaker on this bill, Alastair Scott, said that it was really quite a technical bill. Let me see if I can bring this bill alive a little for the people who are watching at home.

The way to think about this bill is that it is a seatbelt bill—it’s a seatbelt bill. So let me explain what I mean by that. As we all know, most of us most of the time when we get into cars don’t end up in accident situations. Most of us don’t run into trouble. Most of us complete our journeys most of the time without ending up in an accident. Nevertheless, most of us most of the time, when we get into a car, put our seatbelts on. We put our seatbelts on because that minimises the risks that we’re going to bear in the, actually, somewhat unlikely event of an accident. So that’s what a seatbelt does. It minimises a quite unlikely risk, but it’s a risk that if it occurred would be disastrous, could be lethal, could certainly end up in real trouble for us. So a seatbelt bill is a very simple measure—well, a measure that if you take it, guards against an unlikely risk, and this is exactly what this bill does. It guards against an unlikely risk, but a risk that if it occurred would be very problematic and difficult.

Coming as I do, originally, from Taranaki, I understand what the waters are like there. Some days it is calm and peaceful, some days, actually, there is usually quite a breeze, and some days the storms rage in from the Tasman.

💬 Barbara Kuriger: Not often.

Not often, but they do happen. In those situations, an oil spill will be extraordinarily difficult to clean up. The pollution would be spread far and wide. The sort of disaster that could occur were there an oil spill—well, it’s hard to contemplate, actually, just how much it might cost to clean up that oil spill. So even though the operators of oil rigs these days do take safety very, very seriously, even though the operators of oil rigs these days do take the idea that there might be an oil spill very, very seriously indeed and do guard against it, if there was an oil spill it would be disastrous. What this bill does is provide protection in the case of that unlikely accident. It’s a seatbelt bill and I commend it to the House.

It’s a great privilege to rise briefly for this call. This event occurred on 9 October 2011, which was obviously round the Rugby World Cup tournament. I commend this bill to the House.

Mr Speaker, kia ora—

I’m sorry to interrupt the member, but it’s come time for me to leave the Chair. This debate is interrupted and is set down for resumption next sitting day. The House stands adjourned until 2 p.m. tomorrow. Pō mārie.

Debate interrupted.

The House adjourned at 10 p.m.