Sepuloni CarmelCROWN MINERALS AMENDMENT BILLFirst ReadingHon CARMEL SEPULONI (Minister for Social Development and Employment) on behalf of the Minister of Energy and Resources: I move That the Crown Minerals Amendment Bill be now read a first time. ASSISTANT SPEAKER (Hon Jacqui Dean): That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon CARMEL SEPULONI: I move That the Crown Minerals Amendment Bill be now read a first time. I nominate the Economic Development Science and Innovation Committee to consider the bill.The bill proposes changes as part of Tranche Two of the Crown Minerals Act 1991 review. The Government commenced a two-part review of the Crown Minerals Act 1991 in 2018. Tranche One was completed later that year. It gave effect to the Government's policy to end future offshore petroleum exploration and confine any future on shore development to the Taranaki region only.Tranche Two was intended to be wider in scope to consider the factors needed to enable New Zealand's petroleum and mineral resources sector's contribution to a productive sustainable and inclusive economy. In progressing Tranche Two the Government decided to focus first on the biggest issues and risks. The Crown Minerals (Decommissioning and Other Matters) Amendment Act was passed in November 2021. This strengthened the Crown Minerals Act's provisions to help mitigate the risks to the Crown and other third parties of potentially having to undertake and fund decommissioning in the future and to expand its current enforcement.To address other matters included in Tranche Two it was decided to make changes designed to align the Crown Minerals Act with wider Government policy while maintaining its current role which is for the economic development of Crown-owned minerals within New Zealand for the benefit of New Zealanders. This approach is intended to allow for a fuller understanding of changes in the wider regulatory system within which the Crown Minerals Act operates such as the resource management and conservation reforms and their impacts before considering whether further changes may be needed.The bill proposes amendments to the Crown Minerals Act in respect to two aspects of the Tranche Two review: addressing the promotional purpose of the Crown Minerals Act in light of Government priorities and iwi and hapū engagement and involvement in Crown-owned minerals. The bill also seeks to clarify and make consistent the permit grant transfer and change tests in relation to decommissioning obligations. The Crown Minerals Act's promotional intent provides little flexibility as to how the Crown manages and allocates rights to Crown-owned minerals.The Crown Minerals Act was amended in 2013 to reflect the policy at the time which was to attract investment in our petroleum and minerals sector. Among other changes the amendments added the Crown Minerals Act current purpose statement which is to promote prospecting for exploration for and mining of Crown owned minerals for the benefit of New Zealand". Since 2013 the strategic and wider regulatory environment in which the Crown Minerals Act operates has evolved. Climate change is an increasing focus as is the use of an intergenerational lens in decision making that considers the longer-term and wider dimensions of wellbeing such as environment social and cultural outcomes. New Zealand now has domestic targets to reduce our greenhouse gas emissions with carbon emissions to reach net zero by 2050. We also recently updated our first nationally determined contribution under the Paris Agreement to set a target of a 50 percent reduction of net greenhouse gas emissions below our gross 2005 level by 2030.In 2019 the Government released a resource strategy setting out our vision for the minerals and petroleum sector as a world-leading environmentally and socially responsible sector that delivers affordable and secure resources for the benefit of all New Zealanders. Since then we have set an aspirational target of 100 percent renewable electricity generation by 2030. In May we released New Zealand's first emissions reduction plan which sets out the strategies and actions needed to contribute to the global effort to limit global warming. As part of that the Government has committed to developing the New Zealand energy strategy to set the direction for New Zealand's path away from fossil fuels and towards greater levels of renewable electricity and other low-emissions alternatives. We are also developing a gas transition plan to establish transition pathways specifically for the fossil and gas sector.While fossil fuels continue to play an important role in keeping the lights on today we know the future will look different. In this context the Crown Minerals Act's current focus on promoting the development of petroleum and minerals does not enable enough flexibility in the choices available to the Crown as resource owner. While it is important that the Crown Minerals Act is able to sustain investor confidence to continue the development of Crown-owned minerals where required the current focus of the Act limits the scope of decisions to achieve a managed and equitable transition away from fossil fuels.The bill proposes to neutralise the promotional intent of the Crown Minerals Act to increase flexibility in the management of Crown-owned resources. We propose changing the word "promote" in the purpose statement to more neutral language that neither requires nor inhibits development of Crown-owned minerals. Associated provisions in the Crown Minerals Act would also be amended to make neutral their promotional intent. One intended effect of the removal of this promotional intent will be to increase flexibility in relation to when and how often future public tenders for petroleum exploration permits take place.The proposed amendments are not intended to change the fundamental role of the Crown Minerals Act in the wider regulatory system which is to allocate development rights to Crown-owned minerals in a way that increases economic benefit to New Zealand. The wider regulatory system such as health and safety environment and conservation laws will continue to provide the necessary checks and balances with regards to the stewardship domains.Feedback from hapū and iwi has been that engagement with permit and licence holders is variable. While there have been improvements in some instances engagement is not always prioritised the quality of engagement is inconsistent and there can be a lack of transparency when sharing information. The current approach to permit and licence holder and permit applicant engagement is largely voluntary and expectations for good engagement can be unclear. Where relationships are poor potential benefits resulting from positive relationships are foregone.We propose to create more certainty around engagement expectations. We are proposing providing hapū and iwi with opportunities to review and discuss annual iwi engagement reports that are currently required of Tier 1 permit holders under the Crown Minerals Act and to enable the relevant regulations to specify minimum content requirements for those reports. We also propose to clarify that decision makers under the Crown Minerals Act may have regard to feedback from hapū and iwi on past permit or licence holder engagement when making permit allocation decisions. Regulation changes will also be progressed alongside the bill to specify minimum content requirements for iwi engagement reports and to require as part of certain application types the provision of contact information to be passed on to hapū and iwi.The Crown Minerals (Decommissioning and Other Matters) Amendment Act 2021 introduced changes to strengthen the decision-making test for permit grant transfer and change provisions in order to reduce the likelihood of companies gaining permits in New Zealand that do not have the financial capability to undertake and fund decommissioning. For the avoidance of any ambiguity we propose changes to clarify and make consistent the Crown Minerals Act various permit grant transfer and change provisions to ensure that assessments can be carried out—not just in relation to compliance with work programmes and permit conditions but also in relation to the decommissioning-related obligation in the Crown Minerals Act.We consulted on the policy proposals that form the basis of these provisions in 2019 and 2020 as part of the Crown Minerals Act review Tranche Two discussion document. Officials also carried out further consultation with hapū and iwi from November 2021 to February this year. We are confident that these changes seek to fairly balance competing interests in relation to the regime and there will be further opportunity for input during the Economic Development Science and Innovation Committee's consideration of the bill. I commend the bill to the House."