Crown Minerals (Decommissioning and Other Matters) Amendment Bill

Members, we now come to Part 2. This is the debate on clauses 8 to 27, and Schedules 1 and 2, “Amendments to other Parts of principal Act”. The question is that Part 2 stand part.

I thought the Minister in the chair, Megan Woods, was going to take a call and I was prepared to let her take one, but she hasn’t stood up, so I’m going to take my first one. My first one is speaking to my Supplementary Order Paper (SOP) 90, and it is around clause 17. In this clause, we want to replace the words “The Minister must” with the words “The Minister may”. There are too many incidences in energy at the moment where the Minister wants to have her hands and her fingers in the gearbox around everything, and we can see the results were actually going to be leading to a lot of energy insecurity in this country. So we want those words removed, because the mandatory imposition of financial security requirements on permits and licences is not something that the Minister should be putting her fingers into. Amending the word to “may” allows discretion to be used by the Minister, but requiring financial security without a risk assessment would be disproportional to the actual risk. I don’t believe, in terms of reading the information that I’ve seen on this bill and listening to the submissions, that the Minister has been listening on this at all, and I would be quite concerned about putting a clause in any energy bill where the Minister “must”, rather than the Minister “may”.

So that is my first SOP and perhaps the Minister, when she’s ready to take a call, may want to get up and tell us why this is going to be a power which she’s going to impose on the current energy Minister or future energy Ministers, and why she feels this is necessary to impose herself and others on this industry when they are going to be decommissioning anyway.

Thank you, Madam Chair—happy to take a call to answer questions as they arise. I will address just a couple of the introductory comments around the requirement and the purpose of the legislation that the member who’s just taken her seat raised in her first contribution. She claimed that this was a piece of legislation that there was no necessity for—it was not required, and we didn’t need it. I’d like to point this committee to the fact that the New Zealand taxpayer has been left with a bill of $349 million cleaning up a decommissioning cost that should’ve been borne by somebody else. I do not think it is fair, I do not think it is right, and I do not think it is just that the New Zealand taxpayers should be left to clean up after a commercial operator has been in and they simply absolve themselves of what is required after the permit.

This is not a theoretical concern. The purpose of this bill was born out of what we have seen happening in Taranaki with the Tamarind situation in the last few years. When we first came into Government in 2018, one of the first things I did as the Minister of energy was to clean up the loophole that the previous Government had left that allowed the situation with the Tamarind to exist. So we’ve closed that down, but we have an obligation to the taxpayers of New Zealand to further protect them from being left with the bill for cleaning up and the decommissioning after someone has finished their activities in exploration and drilling work.

The member also said that this was retrospective legislation and something that should be considered carefully, and on this point I absolutely agree with her. This is something that we have taken seriously, that it is something that we do have to make sure we are ensuring that we are working within the usual conventions of how it is this House would legislate on these matters.

One of the things that was pointed to in the advice that we heard was that the licences that are issued under the Petroleum Act of 1937 are subject to an explicit statutory obligation to remove any chattel, machinery, or any other property placed on land through the course of the licence. So in terms of making sure that you do fulfil what is set out in that 1937 Act and those licences are issued under, this is just putting in law what is required of the companies anyway and protecting the New Zealand taxpayer. Permit commissions can further specify holders’ decommissioning requirements, and most permits do include some form of decommissioning obligation, though conditions can vary between permits. So it is not an unreasonable expectation that someone who holds a permit for oil and gas exploration in New Zealand should expect that they will have an obligation to remove any chattel, machinery, or any other property placed on the land throughout the course of the licence. Of course, post-1937 and the passage of that, we did also move to offshore exploration and drilling within our oil and gas sector. So this is not unusual.

In developing this proposed legislation, we consulted the Legislation Design and Advisory Committee guidelines, and these state that the starting point is the legislation should not have a retrospective effect and should not interfere with accrued rights and duties. But we note that legislation should generally have prospective and not retrospective effect. The proposed provisions in this bill will apply prospectively but are designed to affect what the fiscal risk to the Crown is the greatest from, rather than future petroleum mining exploration permits. So this consideration was something that was given due consideration during the course of the bill.

In terms of the member’s SOP that she spoke to in her contribution, we will not be voting in favour of the Supplementary Order Paper that the member has put up. We consider that acquiring a financial security from a permit holder is an important risk mitigation that needs to be put in place to protect the taxpayers of New Zealand. Now, the taxpayer already has obligations under the Crown Minerals Act in respect to decommissioning, but so do those who hold the licences, and that is what this financial security is about. It’s about making sure we’re putting in that risk mitigation so not only is the Crown responsible for its obligation under decommissioning but so are those who have commercially operated these permits and have received profit from doing so.

There is flexibility built into this legislation, and that’s one of the critical elements that is in the bill that we’re debating in the House. The amount and kind of security is decided by many factors, allowing a risk-based approach to the implementation. It’s for that reason, that we have already embedded within the framework of this legislation this risk-based approach that is flexible, that we won’t be supporting the member’s SOP.

While I expected that the Minister may not support this particular Supplementary Order Paper (SOP) and has given an explanation about why this particular clause is required, the Minister has failed to tell me why the words “Minister must” rather than the words “Minister may” are so important, because, for us, the words “The Minister must” would need to come out, because we don’t support this particular piece of legislation. I understand many of the explanations—also understand the explanation that the Minister gave around decommissioning and why it’s important. It’s not decommissioning that’s the problem; it’s the extent of the overreach which is in this bill. So I hope, when the Minister takes the next call, that she’ll take an opportunity to tell the House why it’s a requirement that “The Minister must” rather than “The Minister may” within my Supplementary Order Paper.

And, if the Minister is not going to take a call at the minute, I would actually also just like to talk about one of my other SOPs at this stage, Supplementary Order Paper 91, and it is to reinsert new section 89E(2), previously removed by the select committee, to remove the strict obligation to remove petroleum infrastructure if it could be repurposed by another permit holder. Now, this is quite an onerous task that needs to be done, and sometimes things can be repurposed. Sometimes things can be used again, and sometimes there are pieces of particular plant and equipment where there may be more issues with trying to remove the particular piece of equipment than there is by actually leaving it where it is. You can certainly see, in some aspects, that some of the equipment, particularly—and I know, with the offshore stuff, they actually become quite seabed orientated, and if there’s no risk of a leak or anything that’s going to cause us any environmental concerns in the near future, then it seems like dead money and sunk money to remove absolutely every last nth degree thing without an absolute reason as to why it’s going to cause a problem. We can fully understand why the industry would want to remove anything that’s going to cause a problem and cause a leak.

And I do just actually want to say that this bill is the problem, not the decommissioning, because what we’re seeing in this House at the moment, and we’re seeing it on a number of bills, is that one incident seems to take this Government down a track of control, ban, and the Minister stands up and talks about the Government paying the costs of decommissioning in the Tamarind situation, which was unfortunate, and it was one of those situations that would be better if it didn’t happen. We all know that from an environmental level, but we’ve got a Minister here that’s really damning the industry over one incident, an industry who is prepared to decommission, an industry which contributes $2.5 billion to the New Zealand economy. It brings in around $750 million worth of export receipts, approximately $500 million in royalties, and income tax for the Crown. So this is not a one-way street. This is not an industry that’s all take, and I also want to reiterate the fact that this is an industry that’s going to help keep our lights on. Even the Climate Commission has made comments around how we’re going to need gas for the future, and this bill is just going to put another nail into this industry and take away investment and really, really hurt the energy security of our country.

I would like the Minister to stand up and refute what I’ve just said, going in through the next 10 to 15 years, where we’re trying to get our energy security under control—that this bill isn’t another nail in the coffin that is going to lead New Zealand to awful climate change problems, with the amount of imported coal we’re bringing in on ships that are actually coming from another country.

I’ll answer a couple of the questions that were put there. The member Barbara Kuriger asked for a more explicit explanation around why we won’t be voting for her Supplementary Order Paper (SOP) that asks that the Minister “must” rather than “may”. When it comes to a Minister having to require permit holders to provide a proposal as to what is the right security for them, it actually is a case that they must do that, because it is a bespoke—it’s not a one-size-fits-all provision. It’s that the Minister must require that each of the permit holders puts forward the details of their particular permit, around their own individual circumstances. So the “may” provision that the member is proposing simply is not workable.

The member has also talked about her Supplementary Order Paper 91, which we will also be voting down. We won’t be voting for this, because, actually, it’s not required. The select committee simply moved that provision when it was there. So, while it was deleted from 89E(2), it was folded into 89E, which does make an amendment that introduces a provision allowing a process to be set aside in regulations whereby infrastructure may be left in place if certain criteria are met. And this would allow a range of considerations to be taken into account. So it’s simply not required. It would be superfluous. It was fixed up by the committee, and it was one of the pieces of work that happened there.

One of the comments—it wasn’t so much a question—that the member who just resumed her seat made was that this is putting an undue onus on industry and that it may cause them to not further invest. But I’d just like members of the House to reflect on the fact that this bill is designed to clarify the existing expectation that decommissioning informs an important part of the petroleum lifecycle. And, actually, most companies realise this and are happy to do so. There are flexible arrangements built into this, and I’d point the member to the fact that, actually, what we’re enacting here is actually following international trends that we’re seeing around decommissioning obligations as the world moves towards decarbonisation, and that we have a number of areas, including New Zealand, where we’re getting to the late stage development of fields, and decommissioning needs to be taken into account. So New Zealand is moving in line with international trends; it certainly isn’t an outlier. At the moment, it has one of the more permissive regimes that did allow for a situation where the taxpayer of New Zealand—it wasn’t just a little annoyance to the taxpayer of New Zealand; it was $349 million. And when I reflect on the houses or the schools or the healthcare that we could have put in place rather than picking up the tab from someone shirking the obligations required of them under their permit, then we as a Government have an obligation to the taxpayers of New Zealand to ensure we do not see more of that.

One of the things that we do know is that the New Zealand oil and gas sector, by and large, with a couple of exceptions, is operated by multinational companies—that we don’t have the fact that companies will be staying in New Zealand. A number of them exit as soon as they exit their permit. There’s no enduring relationship that needs to be preserved or preservation of reputation, which, if it’s a domestic onshore company, is a further incentive for companies. We do have some New Zealand - based petroleum and oil companies, who certainly are very aware of their reputation and the need for them to preserve their reputation, and this is exactly why a flexible, risk-based approach has been built into this legislation so that a number of factors can be taken into account.

The member talks about the need for us to move away from moving coal; I couldn’t agree more. Central to this Government’s energy strategy is the fact that we need to move away from fossil fuels and we need to have transition plans, whether that be coal or whether that be gas—both are harmful to our climate and, as a country, we have to have a plan to move ourselves to renewable forms of energy—but, in order to make sure that the taxpayers of New Zealand are not left holding the decommissioning bill, it is the responsibility of a responsible Government to put them first and foremost.

Thank you, Madam Chair. It’s a pleasure to rise and support my colleague Barbara Kuriger on this side of the Chamber, and I’ll start off with a comment to Minister Woods, who just took her seat. I completely agree with her in terms of our Government having a plan to have a greener future, and I think all of us actually want to make sure that our carbon emissions are reduced and we all sort of buy in to that rhetoric. Having said that, when a Government starts talking about having the obligation to the taxpayers and actually imports more coal than we used to because of their policy settings, you have to wonder whether we should start believing anything that the Government is talking about. When the Minister says “having an obligation to the taxpayer”, it’s not just the consumers who pay tax. It is actually the businesses who pay tax as well, and you need to make sure that the settings are fair.

I think we want to represent the people who have submitted to the select committee, and I’d like to quote from the chief executive of Energy Resources Aotearoa, John Carnegie. There were many submitters who said that they support the ideas that the Government is talking about in terms of the new rules for decommissioning. They totally support it—many businesses believe in the commercial and the corporate responsibilities that they have when it comes to decommissioning. It’s not that all of us on this side are saying, “Oh no, let them leave everything that they’ve put in place and dirty our environment and just leave it, and the taxpayers and the Government should actually pay for it.” We’re not actually saying that. What we’re talking about is in terms of the flexibility, which this doesn’t seem to have. It’s an overreach and not a balanced one.

When we’re holding operators liable for things that happen after they sell the business and they are held continually responsible, in what other sector do we have this responsibility? It’s like having a factory owner who sells the factory and for unforeseen circumstances something happens in the factory after he’s actually sold it, and then the person who sold the factory is held accountable for it when the transaction’s already happened many years ago. It doesn’t happen in a normal commercial transaction.

I mean, I said this in the second reading. I think it’s sort of like when you look at the very idea of rugby, we all love rugby. It’s like when somebody kicks for goal, and then the goalposts are shifted after the ball has been kicked. I mean, that’s ridiculous, and it certainly goes to show that people on that side of the House don’t understand about business or about contracts.

It’s about the obligations that people have when they sign a contract. You don’t let people who have invested under a particular condition in an industry to all of a sudden find that the goalposts have actually shifted and the responsibility that they now face is completely different to when they invested. Who would invest in New Zealand in the future, when that actually happens? I think when Governments make law, we need to make clear law that is actually fair, and not shift goalposts in the middle of it, or after the transactions have happened.

In terms of the Tamarind case, yes, it is very unfortunate. It shouldn’t have happened, but it has. But the thing is that when you look at businesses, sometimes they fail. Operators go bankrupt and we have circumstances in all businesses where that does actually happen. But to think that that one incident should sweep the whole industry into being responsible in a sort of obligation that backdates even to after when they sell their business seems very much a huge overreach. I would like the Minister to explain how this bill isn’t an overreach and how she thinks that it’s going to fix the problem when sometimes businesses do fail, even with this in place.

I’ll address the question that was in that member Melissa Lee’s contribution. Most of the points she’s raised have already been addressed in earlier contributions that I’ve made in answer to previous members, but I will reiterate, once again, why it is that we require this bill and why it is not an overreach.

I think the members are talking very generally about an overreach, but I’d like to point the members to the provisions of the bill—new sections 89K and 89L in clause 17—that actually build in the flexibility that is required around perpetual liability and how that will be assessed. It provides a wide range of tools within the legislation for the Minister and for the regulator designed for this flexible approach, because we understand that one size will not fit all.

I think one of the things that the members of the Opposition are failing to understand is that in the life cycle that we’re at in terms of New Zealand’s oil and gas industry, we are having a number of late-life field operators come in, and we’re seeing a lot of the large companies move out and onsell their permits. So to just write off what happened with the Tamarind purchase as unfortunate is really a dereliction of the duty that is required by a Government to New Zealanders to protect them from the potential liability that fits here.

What we do have is a number of smaller companies that don’t have as much of a balance sheet behind them that specialise in late-life assets—in squeezing the last drops of oil and the last petajoules of gas out of a field. That is their speciality, but they tend to be much smaller operators. They’ll often have subsidiaries that sit under a parent company that dissolves when their interest in New Zealand finishes, and that’s certainly what we saw in Tamarind.

What is acknowledged internationally, and not just in New Zealand, is that when you have an industry that is moving into this phase, you have to put in more protections for the domestic economy in which those companies are operating so that there isn’t just an upping sticks and leaving behind of the chattels and the assets that the 1937 legislation put an obligation on those holding a licence to remove. This is not a new duty. This is putting in place protections for New Zealanders so that we don’t have multinational companies just exiting New Zealand, taking the profits that they’ve been drawing out of those oilfields and gasfields, and leaving the New Zealand taxpayers—both consumers and businesses—to pick up the tab. That simply is not fair.

Now, I recognise there are a number—most—of our oil and gas operators in New Zealand that fully and well understand their obligations around decommissioning. They understand what is required of them with their permit. They understand what corporate responsibility means and what they will need to do. But that does not remove the obligation on the Government to put in place the protections for the New Zealand taxpayer around this so that we’re not left with another $349 million tab coming to the taxpayer rather than the people that have been not only extracting the oil and the gas but the profits from New Zealand and leaving what is their obligation on New Zealanders.

Bear in mind that New Zealand and the New Zealand taxpayers already have an obligation under all of our oil and gas permits in terms of picking up some of the costs of decommissioning, but it’s not the full cost. All we’re asking for is a regime that puts in place some protections so that those that hold the permits will fulfil their obligation that is set out under legislation that has been in this country since 1937.

Now, it’s not unfortunate we got into the Tamarind situation. If the previous Government hadn’t created the loophole that allowed it to happen, we wouldn’t have been left with that $349 bill. We’ve fixed that. This is the second stage of the fix to ensure that we further protect the taxpayers of New Zealand.

Thank you very much, Madam Chair. I would like to make a contribution to the Crown Minerals (Decommissioning and Other Matters) Amendment Bill and speak to Supplementary Order Paper (SOP) 91 in the name of my colleague, Barbara Kuriger.

This SOP refers to clause 17, and asks that new section 89E(1) on page 13 after line 3, inserts another set of wording that doesn’t make the obligation on removing assets after decommissioning. I have listened to some of the questions and the answers from the Minister Megan Woods and I’m still quite confused about the necessity for the Crown Minerals (Decommissioning and Other Matters) Amendment Bill. Because, from my understanding, when applications are made via the Resource Management Act and resource consents are applied for, there is a requirement to have a bond in place for this very purpose, so that when a resource consent reaches the end of its workable life there is money now set aside for the decommissioning and rehabilitation of the land.

I’d just also like to point out around the “must remove” rather than “may”, because there are a couple of examples that I’d like to use around where that obligation to remove is enforced, how some opportunities might be lost. One of them is around the site at Pike River, which is back in the front of mind again this week. At the Pike, over 2006 and 2007, there was a huge amount of infrastructure installed to the mine, and of that were 7.5 kilometres of brand new, 100 kilovolt lines to a brand new substation that was purpose-built, and then a further 8.6 kilometres of 33 kilovolt line, which went to another substation which split the power then into three 11 kilovolt lines. Along there, in order to get the lines in there, there was something like 180 power poles inserted, plus 16 kilometres of two-lane sealed road. Now, part of the conditions of that particular application was that, at the end of the life of the mine, those assets would all be removed.

There’s another example I’d like to use about decommissioning through the Crown Minerals (Decommissioning and Other Matters) Amendment Bill: the OceanaGold mine site in Reefton. For those of you who don’t know Reefton, which is locally known as the town of light, it is a place of innovation. It’s the home of the Bearded Miners, who are a famous tourist attraction in that town, and John Bougen’s tiny homes manufacturing. It’s also got world-class mountain bike tracks. But, of course, it’s most famous for one of its older personalities during the mining era of that town, Little Biddy, who is now the name of Reefton Distillery’s most famous gin. But when the OceanaGold mine went in, so too did the roads and the bridges, and the buildings in there. And since that mine closed down in 2016, the local community has been trying to repurpose some of those assets and use them as a tourist attraction. So if we have a situation such as this bill, then if those assets are forced to be removed those opportunities have also gone with them. This SOP simply leaves the door open for the opportunity for those assets to have another purpose, to give more life to those communities, because—as you will no doubt know—when those mines close, so too do the jobs go with them, and these assets can provide a very real alternative for workers. Thank you, Madam Chair.

Madam Chair, I’ve spoken to the Supplementary Order Paper (SOP) that the member that’s just taken her seat, Maureen Pugh, has spoken to, and will give an indication to the committee that we won’t be supporting those. I’d like to also point out to the member that the examples she used are completely irrelevant. This is a piece of legislation that is about petroleum permits. None of the mining activities that the member spoke about would be touched by this legislation.

I move, That the question be now put.

Thank you. I’ve still got two tabled amendments that I wish to speak to, so I don’t think we want to close this down just yet, because I want to hear what the Minister wants to say on another couple of issues. However, what I did want to say, before I move to those other tabled amendments, is that the Minister talked about overseas companies as opposed to New Zealand companies. Now, we know that around the world that this is an industry—we’ve just had COP26; we know that we’re not the only country in the world that’s actually trying to get to the new clean energy future. I just must point out that this country’s gone backwards in the last few years, which is very disappointing. It was heading towards 90 percent renewable electricity in 2016, and struggling to make 75 percent this year.

So we’ve just got to be careful what we do, because the Minister talks about a transition, and I’m still waiting to see one. I don’t actually think this is going to be part of a good transition going forward any time soon, because when I go out into energy meetings and conferences, the word that is most often used is “uncertainty.” Government has no plan; Government has no transition. Call it a just transition—you can call it whatever the Government wants to call it, but actually, if it isn’t a transition, it isn’t a transition.

We know that coal and gas are two fuels that at some point in the future we will need to have replacements for. But that’s a long way out in terms of this country, in terms of the needed gas. The Climate Change Commission made that point. It seems really silly to target our own resources and lob off what we have and import fuels from Indonesia that are not as climate-friendly as the ones that we can produce in our own country.

What I also want to say is that the Minister’s made a lot of noise today about the money that it cost to unpick the Tamarind. You know, that is not a good thing that happened, right? We stand here and we know that. We’re not arguing decommissioning; we’re arguing this bill, because it’s an overreach.

The Minister talked about schools and building buildings and making sure we need the money in this country to do the things that we need to do. I know that the Minister’s been to Taranaki, and I know that the Minister will have seen buildings all around Taranaki and probably in other parts of the country which have been paid for by this industry. So, you know, it’s all very well to cry in one direction and not appreciate what has happened in another direction. I can tell you that a lot of stuff, the local swimming pool, a whole range of things—and I bet there’s a few members on that side of the House that have actually been to WOMAD over the years—are all supported by this industry. They have been absolutely fantastic sponsors in the community. So I don’t think it’s fair for this Government to characterise this as an industry who just does stuff to us and walks away. That is not true. I know that those overseas companies will dearly have in mind about decommissioning, because right across the world, they are the focus of attention of a lot of people. So no one is actually disputing, Minister, that we need to decommission; we are just disputing this bill.

So I’m going to start talking on the next one of my tabled amendments, and this is an amendment also to clause 17. This is about removing the trailing liability provisions, because this is an unnecessary and highly unusual instrument in New Zealand law. Other provisions in the Crown Minerals Act 1991 and this bill will ensure that the decommissioning will be properly executed. The bill, as it stands, makes attracting directors unnecessarily difficult—[Time expired] Madam Chair?

Barbara Kuriger.

💬 BARBARA KURIGER: Thank you, Madam Chair. This bill, as it stands, will make attracting directors unnecessarily difficult, as they will be subjected to perpetual liability. It also undermines the norms of civil and criminal liability by making directors liable for decommissioning after a permit has been transferred. If you want an equivalent to that, perhaps we should be asking about perpetual liabilities of Governments that make really silly decisions in this space, whether it’s the Public Service, whether it’s Government or not. When Ministers get to the point where they keep pointing the finger at private sector for their decisions and not wanting to take personal responsibility for their own policy decisions, then I start to have a problem with it.

We had submitters come to the Economic Development, Science and Innovation Committee, and they said there is no other directorship in New Zealand that would be expected to be able to work under this regime. Now, is this a start of something that this Government is going to continue in terms of overreach into other directorships? I don’t know. Nothing would surprise me at this point in time. But is it fair to actually override what good directors put in place by putting legislation in place that’s going to expect directors of a particular industry to have to go much, much, much further than directors in other industries? It’s something that’s untenable and unheard of.

I know that this Government is opposed to large business. I know they’re opposed, particularly, to large international business. We’ve sort of heard connotations—probably not those words this morning, but heard connotations come out of the Government. But some of those businesses have done amazing things for our community. I’m sure Angela Roberts has probably been in the swimming pool in New Plymouth, I’m sure been to WOMAD, and I’m sure many others on the other side of the House have actually benefited from this industry. So let’s not stand here and pretend that they’re all bad, because it doesn’t matter if I look at my energy portfolio or my agriculture one, this Government is actually pointing the finger at the industries that we need in this country. We’ve just had a massive pandemic, and I know that you’ve noticed, and we’re not happy with all the things that are going on around that at the moment, either, and overreach. But at the end of the day, the energy industry is something that we need in New Zealand, and right now, with not just this bill but various things that are going on around energy by this Government, we are going to become a very energy—

CHAIRPERSON (Hon Jacqui Dean): Order! Order! Can I ask the member to come back to the bill.

💬 BARBARA KURIGER: Yes. Thank you, Madam Speaker. I will come back to the bill. So in order to keep our energy security up, I propose that, with this tabled amendment that I’ve put in place, we do not expose the directors of this industry to wider director duties than we do with directors from other industries.

Now, I’ve got another tabled amendment here which I’m putting in place. I don’t expect the Government will support it, but it would be nice if they did. This amendment is to entirely remove the post-decommissioning fund, because the fund was entered into the legislation without consultation, and that’s something that we hear pretty often these days—without consultation, “let’s just do it; don’t ask anybody.”—and without a cost-benefit analysis or evidence of a problem that it seeks to solve. The fund ignores that the “polluter pays” principle as a levy is imposed on all permit holders, regardless of their actions or their risk profile. The “polluter pays” principle is a foundation for environmental law in New Zealand, and it creates a perverse incentive for companies to act within the bare minimum legally mandated scope of decommissioning as they will still pay for decommissioning failures. So, you know, it’s just another piece of this bill that is overreach.

In the remaining section of this speech—and I’ll probably take another one if I get the opportunity—is that we’re not opposed to decommissioning, just the overreach—[Time expired]

Thank you, Madam Chair. I will speak to the member’s Supplementary Order Papers (SOPs) 87 and 89 and give an indication to the committee of why we won’t be supporting either of those. But I actually think, in fairness to our oil and gas industry, that there’s a point I need to clarify from the speech from the previous speaker, Barbara Kuriger. I have never heard any of the women or men of our oil and gas industry come into my office and say they should not have to fulfil their statutory obligations because they pay for swimming pools, or that they should not have to fulfil their statutory obligation because they donate some money. I have never heard one of them say that they don’t recognise that they have obligations under their licences to uphold their end of liability for decommissioning, and I think that to suggest otherwise actually does a disservice to the men and women who work in our oil and gas industry.

So I take the SOPs that we won’t be supporting that the member has put up and, the first is SOP 87 in the name of Barbara Kuriger. This is the amendment that seeks to remove the trailing liability provisions from the Act. We won’t be supporting this. We consider that perpetual or trailing liability is an appropriate response to the trends observed both overseas and here in New Zealand. I think one of the things that we have to recognise is that in the oil and gas sector New Zealand does not exist in a vacuum and there is a lot of working going on internationally around what provisions need to be put around it. While the New Zealand petroleum sector differs in many ways from some overseas jurisdictions, the policy driver for the provision that we’re talking about here in fact has a lot in common with overseas jurisdictions that we would look to.

It’s important to consider all views around perpetual liability in the context in which the bill intends it. The provisions are designed to only be used in the case of the last resort where the current permit holder cannot carry out and fund decommissioning. So I think it’s important to read the detail of what it is that is being established under this legislation. The provisions are already limited in the way they only apply to wells and infrastructure present at the time of transfer. So there is a lot of detail that I think the member needs to go back and have another look at.

In terms of the onus on directors and the criminal penalty that will apply to directors, this is a penalty that is reserved for only the most serious of cases where directors knowingly act to fail to meet decommissioning obligations. That is a very high test—knowingly act to fail to meet the decommissioning requirements that occur both under statute and, in many cases, within the individual purpose. So I think we need to understand when it is that these provisions will be applied. The bill provides defences for directors if they can demonstrate that they took all measures to ensure the business could meet its decommissioning obligations or that there were situations that prevented their actions. This is a provision of criminal liability for those directors who knowingly seek to shirk their responsibilities for decommissioning and instead leave New Zealand taxpayers paying the tab, and I don’t there are many fair-minded New Zealanders that would see that as something that is an overreach. I think they’d be thankful that this is a provision and a protection that we are giving them under law.

An amendment, of course, as the member will know, was made at the select committee to limit liability so that a director could only be liable for criminal prosecution if they were a director of the current permit holder at the time the breach occurred. So I think there has been some work done on that provision, and for that reason I’m satisfied that it is appropriate and it is proportionate and it is the right thing for the Government to do. So we will not be supporting SOP 87.

Neither will we be supporting SOP 89 in the name of Barbara Kuriger. This is the associated civil pecuniary penalty that this ones speaks to. The post-decommissioning obligation is an important provision in there to protect taxpayers from expenses incurred from work required to wells and infrastructure over the years and decades after decommissioning has been completed.

Subpart 3 of the bill requires permit and licence holders to pay into a fund to provide a financial security to address issues related to the monitoring, maintenance, and remediation of wells and infrastructure left in situ after decommissioning has been completed, and in practice it’s likely that Government agencies will be left to carry responsibility for monitoring and remediating decommissioned wells and infrastructure. It’s appropriate that those who have benefited the most from the petroleum production should financially contribute to this work. I think that that passes a pretty clear fairness test, and I do note for that member’s assurance that this post-decommissioning regime for decommissioning wells and infrastructure are well established in other jurisdictions—certainly other petroleum and gas producing jurisdictions that New Zealand would look to: Norway, Canada, and the United Kingdom. So this really is bringing New Zealand more into line with those more developed regimes that we see in those countries.

I move, That the question be now put.

Thank you, Madam Chair. A very quick question to the Minister. She has actually talked about the decommissioning and, you know, answered some aspects of the question that I actually asked in relation to the responsibility by corporates after they’ve actually on-sold their business.

I’d just like to compare a situation for her, and I would like her answer as to whether she actually thinks that that would be fair. A Minister is responsible in setting, you know, in terms of a responsibility, for example, the Government’s decision to kill off the idea of oil and gas exploration in the Taranaki, which killed off thousands of jobs, and then, basically, said that the reason why the Government was actually doing that was to reduce the carbon emission profile of New Zealand, and we’re actually moving to a greener future for New Zealand. I completely understand what the Government was actually talking about.

Similarly, an oil exploration company drills, got a licence to drill and explore and all that sort of stuff, and they’ve decided that, you know, they now want to move and actually move on, pass on the licence to another company who could actually continue on the job. Something happens like in the case of—maybe Taranaki is actually a terrible example. But something happens and they’re not able to continue to do so. Similarly, the Minister’s idea about going a little bit more green. We want to reduce the carbon emissions and actually kill off oil and gas exploration. But the thing is that the end result is that we are importing more coal from overseas. Does this mean that the country should be sending the Minister the bill for the increase in carbon emissions that now New Zealand is actually facing, just like businesses are actually being faced with the bill of the clean-up? No other industry, as I actually said previously, is responsible, so perhaps the Minister could answer whether that comparison is actually fair. If not, why not? Because I think it’s actually very similar.

Thank you, I want to go back to Supplementary Order Paper 91, that I spoke to before, in the name of Barbara Kuriger. This relates to clause 17. I used a couple of mining examples in my contribution, and I realised that the Minister has referred to them as not being relevant. I used them as examples of the types of local infrastructure that is often built when people are accessing sites, no matter what they’re doing there, whether it’s gold mining, coal mining, whether it’s oil and gas exploration. So I just want the Minister to perhaps reflect on the compulsion to remove those assets when they could be repurposed.

What is the Minister’s aversion to actually having that infrastructure remain in place for other purposes? Because we know that when things happen and mines decommission, there is always loss of jobs, loss of community infrastructure, and if they can be used for other things—and it just seems ironic to me that, you know, we have these assets that could be repurposed. The Government, on one hand, is saying they’re worried about wasting taxpayers’ money. And on the other hand, they’re quite happy to have millions of dollars’ worth of infrastructure removed and taken out with the decommissioning process. It just beggars belief, to me, that that would be a compulsion, as part of it. Simply, all I’m asking is: would the Minister consider that this is a negotiable arrangement at the end of that process? Because we don’t want to lose something that can be repurposed and perhaps grow another industry out of that potential that is there.

We know that there are some contributors, very strong contributors, to community, while they are there on site, and Barbara Kuriger has referred to them. I’ve witnessed it myself. The mining industry, no matter what they’re mining, are always generous and community contributors. So we simply want to make the best of the assets when those jobs are gone and those industries are gone. And I just ask the Minister to maybe reconsider the strictness of the provision and look to Supplementary Order Paper 91 as a potential solution to that. We don’t want the industry to exit completely with everything that they’ve invested in, because that, Minister, would be a waste of not taxpayers’ money but certainly the business’s money and the investment that they’ve made in setting up. It is an irony that we have the Government or the Minister saying on one hand that they don’t want to waste taxpayers’ money, but they’re quite happy to waste these opportunities.

If we continue to pass legislation like this in the House, I fear that this country is going to be left in a situation where no one’s going to want to come here and invest. Because when you start passing retrospective legislation, it spooks investment. It spooks business from setting up here in New Zealand. At a time when we need to be encouraging more investment into this country, as we pick up the pieces from extended lockdowns and business closures, all opportunities need to be considered for the potential that they hold for keeping our communities employed and adding to the tax contribution that they make to this country so we can pay the bills in the future. I just ask the Minister, please reconsider Supplementary Order Paper 91. Thank you, Madam Chair.

Thank you, Madam Chair. I actually just wanted to clarify something that the Minister said before, because I often find that the Minister makes light of comments and made some reference to the fact that I mentioned swimming pools. Well, swimming pools was one example, and the point I want to make to the Minister is that, actually, when you’re going to make an argument about an industry, there are pluses and minuses, and I’ve only heard the Minister make minuses about this industry today, and the swimming pool was just one example. It’s all very well for the Government to stand here and say, “We need to fund X, Y, Z, Z and extra, with all this money that we could have actually had because we had to clean up after Tamarind”. And, as we keep saying, no problem with decommissioning; we wouldn’t have wanted that situation to happen. But, for goodness’ sake, Minister, would you please give the industry some credit for the assets that it has built in our communities. You can’t make one side of the argument on the ledger without making the other, because if you don’t balance that equation up, the full story’s not happening. So thank you, Madam Chair.

I move, That the question be now put.

The question is that Barbara Kuriger’s tabled amendments to Supplementary Order Paper 86, amending new sections 89M and 89T, be agreed to.

The question is that Barbara Kuriger’s tabled amendments to Supplementary Order Paper 86, removing post-decommissioning fund provisions, be agreed to.

The question is that the Minister amendments to Part 2 as set out on Supplementary Order Paper 86 be agreed to.

The question is that Barbara Kuriger’s amendment to clause 17 set out on Supplementary Order Paper 90 be agreed to.

The question is that Barbara Kuriger’s amendment to clause 17 set out on Supplementary Order Paper 91 be agreed to.

The question is that the Minister’s amendments to Schedule 1 set out on Supplementary Order Paper 86 be agreed to.