Duynhoven Harry: Crown Minerals Amendment Bill — Third Reading 
Duynhoven Harry: Crown Minerals Amendment Bill — Third Reading 
[Volume:610;Page:7994] 
Hon HARRY DUYNHOVEN (Associate Minister of Energy) 
: 
 I move  
That the Crown Minerals Amendment Bill be now read a third time 
. This bill makes a number of amendments to the Crown Minerals Act—the Act through which the Government manages all in-ground petroleum gold and silver and approximately half of the coal and other mineral resources in New Zealand. The Government’s fundamental policy objective for managing— 
Peter Brown 
: I raise a point of order— 
Mr SPEAKER 
: I know what the member is going to say. I know that meetings are about to occur but there will be no more conversations inside the House. I ask members to please have them in the lobby. 
Hon HARRY DUYNHOVEN 
: The Government’s fundamental policy objective for managing those resources is to allow continuing investment in prospecting exploration and mining which is in accordance with good exploration and mining practice. That objective must be achieved while ensuring that there is an efficient allocation of prospecting exploration and mining permits that the Crown obtains a fair financial return from the extraction of its minerals and that there is due regard for the principles of the Treaty of Waitangi. Exploration for and development of those minerals delivers resources vital for the economy regional employment export earnings and energy security. 
The Crown Minerals Amendment Bill makes a number of amendments to the principal Act that will improve the rules under which those valuable resources are managed. The bill also addresses issues that have arisen because of recent court decisions concerning the transition from the previous regime under the Mining Act of 1971 and the Coal Mines Act of 1979 to the Crown Minerals Act regime. The bill removes the right of licensees to extend or renew their mining licences under the now-repealed Mining Act and Coal Mines Act as of 5 p.m. on 19 September 2002 in order to give effect to the original policy intention concerning the duration of mining licences. It is this aspect of the bill that has dominated the debate in this House. I would like to take the opportunity to dispel a few myths in that regard. 
Prior to 1991 licences to mine minerals or coal were granted under the Mining Act or the Coal Mines Act. Those Acts provided a right in priority for holders to apply for new mining licences if they applied for them before their current mining licences expired. The policy intention when the previous National Government put the Crown Minerals Act in place was that existing mining licences under the repealed Mining Act and Coal Mines Act would have a limited life and would not be able to be renewed. That was widely understood within the industry and was the basis upon which officials and the industry proceeded from 1991 onwards. In the year 2000 the High Court held in  
Glenharrow Holdings Ltd  
v  
Attorney-General 
 that the right of mining licence holders to apply for a new mining licence had not been extinguished by the Crown Minerals Act. The court also held that it is still possible to extend the term of a mining licence as a variation of the conditions of the licence. However in subsequent proceedings in April 2003 three Court of Appeal judges confirmed unanimously what the Crown had consistently maintained which is that since the old legislation was repealed in 1991 the Minister of Energy neither has had the power to grant a new licence nor was able to consider an application to vary the term of a licence. I feel that it is especially important to point this out for the benefit of the member for Whangarei who in his second reading speech appeared to be unaware that the Court of Appeal has in fact already ruled on this particular matter. 
The Government believes that the Act must be amended to ensure that the rights to renew or extend mining licences are expressly removed. These changes will mean that repealed legislation is not perpetuated and that landowners or occupiers have a say about mining on their land as was always intended by the Crown Minerals Act. The bill does not extinguish property rights. All current mining licences will continue in force until they expire. At that time if licence holders want to continue to mine they can apply for a mining permit under the Crown Minerals Act. Glenharrow Holdings Ltd has been granted conditional leave to appeal to the Privy Council. Special provisions have been included in the bill to ensure that the court’s final judgment in the ongoing Glenharrow proceedings is protected and that the decisions in this litigation are applied to any applications received prior to 5 p.m. on 19 September 2002 including applications by Glenharrow Holdings Ltd. I feel it is really important to stress this—those have been protected. 
Another key amendment which has been overlooked during the debate is clause 5. Amongst other things clause 5 clarifies the requirements when the holder of an exploration permit wants to extend its duration. An exploration permit can be granted initially for a term of up to 5 years with a right to extend the duration for up to a further 5 years subject to certain requirements including the requirement to relinquish at least half of the original permit area. This “use it or lose it” requirement has been part of the regime in New Zealand for over 20 years and is common overseas. It is well understood. It has become apparent that the way the Act is currently written exploration permit holders may be able to avoid the relinquishment requirement in a way that was not intended. The amendments will ensure that exploration permit holders who have not made a discovery and want to continue basic exploration beyond the first 5 years must relinquish at least 50 percent of the permit area on renewal. These amendments strengthen a policy that fairly balances the interests of the Crown and the interests of permit holders. It provides an incentive for permit holders to explore efficiently and it allows the Government to make acreage available to new explorers to ensure that exploration continues to flourish. 
The bill also contains a number of technical amendments some of which I would like to clarify for the benefit of members. During the debate in this House there seemed to be a lot of confusion about clause 9 and a misunderstanding that it somehow relates to the provisions to remove the right to renew and vary mining licences under Part 2 of the bill. There is no such link. Clause 9 amends the principal Act to allow the Minister’s unit development powers to apply to both licences and permits. Where a mineral or petroleum deposit extends across the boundary between adjacent permits and/or licences and the parties fail to cooperate the Act gives the Minister the power to require what is known as a unit development in order to ensure that minerals and petroleum along the boundary are not wasted. The way that the principal Act is currently written the Minister can impose a unit development only in relation to two or more adjacent permits. It does not enable the Minister to require a permit and an existing privilege or two or more permits or existing privileges to be developed as a unit. Clause 9 will amend the Act so that the unit development powers apply to both existing privileges and permits. The term “existing privilege” is defined in section 106 of the principal Act and includes licences that were granted under the former Mining Act the Coal Mines Act and the Petroleum Act. 
I would also like to address two issues raised by the member for Coromandel during the Committee of the whole House—and I might observe that she was one of the few people who seemed to understand much of this bill. Ms Goudie raised concerns about clause 5 and in particular the proposed amendments to section 36(1)(b) which she claimed would allow the Minister to unilaterally decrease the minerals to which a permit relates. These concerns are unfounded. The Act makes it clear that the minerals to which a permit relates can be decreased only with the prior written consent or on the written application of the permit holder. Ms Goudie also asked why I have not taken this opportunity to clarify that coal-seam gas is petroleum and not coal for the purposes of the Crown Minerals Act. As I pointed out this matter was deemed to be outside the scope of the bill. However Ms Goudie will be pleased to know that I will be pursuing alternative means to clarify this anomaly and look forward to National Party support when the amendments come before the House. 
In conclusion I would like to reiterate that the Crown Minerals Amendment Bill will improve the management and allocation of rights to Crown-owned minerals and ensure that the original policy intentions concerning the transition from the previous regime to the regime under the Crown Minerals Act of 1991 are implemented.