Smith Lockwood: Crown Minerals Amendment Bill — Second Reading 
Smith Lockwood: Crown Minerals Amendment Bill — Second Reading 
[Volume:610;Page:7526] 
Dr the Hon LOCKWOOD SMITH (NZ National—Rodney) 
: 
 This Crown Minerals Amendment Bill is very important legislation because it expunges property rights without compensation. If a Government is about to expunge property rights without compensation careful thought should go into that. I was not on the Commerce Committee that considered this bill but I have examined the commentary the report of the select committee in some detail. I note that it is a split report. I note that National and ACT members have submitted a minority report to this House and therefore the majority report is the view of the Government. Far from it being a careful consideration I find it a sloppy piece of work. I will explain over the next few minutes why that is so and why this bill should not be read a second time. It actually should go back to the select committee for the work to be done more carefully. 
This issue is so important because when the High Court looked at this issue in 2000 it was not some inexperienced judge that looked at it; Acting Chief Justice Heron looked at it. He said that property rights that existed under the Mining Act 1971 and the Coal Mines Act 1979 were not automatically expunged by the Crown Minerals Act 1991. He pointed out that there was no automatic right of renewal of a licence but he certainly argued that there was the right to apply for a renewal of a licence. That is critically important because this legislation will totally expunge that right. Under the Mining Act 1971 a licence to mine was a property right. Under the Crown Minerals Act 1991 the permits that are issued are not property rights. So these are important issues. 
Of course as the Minister of Energy has said when this matter was taken to the High Court again Justice Chisholm appeared to give a somewhat different decision. But if we look at the report of the Government members of the select committee we see that it states: “Justice Chisholm disagreed in the second  
Glenharrow 
 decision with the proposition that mining licence holders continue to have a right to be granted a new licence for the following reasons:”. Justice Heron in the first case did not say they had a right of renewal; he said they had the right to apply for one. There is a big difference. 
If we look at the reasoning of the Government members of the select committee as stated in the majority report to this Parliament which we are debating in this second reading we see that it is absolutely flawed. The Government members of the select committee said that Justice Chisholm in the second court hearing made the decision that licence holders do not have a right to be granted a new licence for first the following reason: “if the court applied Glenharrow’s interpretation this would mean mining licences can be perpetually renewed”. OK but in the previous decision Justice Heron did not say they had a right to be granted a renewal; he said they had a right to apply for one. The first argument of the select committee is totally flawed because the issue is not about licence holders having the right to be granted renewals for perpetuity; the issue is whether they had a right to apply for a variation in the term of their licence. 
The select committee then goes on to say: “the language used in section 77(2) of the Mining Act 1971 suggests the Minister has the right to decline an application suggesting that there is no automatic right of renewal”. That is exactly what Justice Heron said in the first court decision and gives no argument why a licence holder should not have the right to apply for a variation on his or her licence term. The select committee then goes on to say: “The effect of the second judgment”—the committee having given those two reasons for Justice Chisholm’s decision—“is that there is now a court order saying the Minister of Energy cannot grant a new mining licence to Glenharrow.” What sloppy thinking! Of course people cannot apply for a new licence under a repealed Act. No one is suggesting that. The issue is about a variation to the term of a licence and that is not an absolutely new licence. 
That is why my view is the select committee has not thought through these issues carefully at all. Its own reasoning in the different paragraphs of its argument does not stack up. The committee points out that section 77(2) of the Mining Act 1971 suggests that the Minister has the right to decline an application and that there is no automatic right of renewal—which is perfectly fair—then goes on to say that the effect of the second judgment is that there is now a court order saying the Minister cannot grant a new licence to Glenharrow Holdings. There is no logic in the analysis by the select committee at all. 
It gets worse. The select committee states also in its reasoning that “the concept that a new licence can be granted is not reconcilable with the scheme of the principal Act and the Ngai Tahu (Pounamu Vesting) Act 1997 particularly the transitional provisions.” It says that on page 3 of the report. On just the next page the select committee in referring to the Ngai Tahu (Pounamu Vesting) Act 1997 says: “The Act includes a specific provision that existing privileges and the rights and obligations of holders of existing privileges are not affected by this vesting.” That is totally at odds with the argument the select committee has given on the previous page. 
This is sloppy work by the select committee. The Government members of the Commerce Committee should be damned well ashamed of this report. This is a serious issue. Property rights are at stake. If the matter were clear-cut we would not have two senior justices in our High Court including an Acting Chief Justice giving decisions that superficially appear at odds with each other. I am not sure that they are totally at odds because both talk about there not being an automatic right of renewal. They both talk about that. The fact that the issue has been to the Court of Appeal and may in fact end up at the Privy Council shows there are important property rights at stake here. The Government members on the select committee should have done a better job in analysing the serious issues involved. 
It even goes on. The select committee acknowledges: “In the second  
Glenharrow 
 decision Justice Chisholm said that Ngai Tahu does not have the power to veto the variation application.” Again that is at odds with what the report says on the previous page. All I can say is I commend the work of the ACT and the National members of the select committee in making their minority report to this Parliament as it points out the serious issues involved in this case. What I have just quoted to Parliament from the Government members’ own report of their work on the select committee shows—far from what Minister Hodgson just said about careful consideration—the sloppiness of their work. Their report shows they have got themselves totally confused over the key issues of the right to apply for a variation to the term of a licence compared with an automatic right of renewal. 
We clearly have a shambles here—an absolute shambles. We have a situation whereby although this legislation protects the position of holders of mining licences who applied for variations to terms or renewals prior to 5 p.m. on 19 September 2002 there are a whole lot of licence holders—an unknown number—who have not done that because Crown Minerals told them they had no right to do it when in fact according to Justice Heron they may well have had a right to do it. It is a disastrous situation. A Crown agency told licence holders they could not apply for renewals and they did not apply; but they could have applied and if they had done so they would have been protected by this bill. Because they were given bad advice by a Crown agency they did not apply and therefore they are locked out by this bill. Their rights are expunged. 
Worse still this legislation will force everyone into the new permits system. The select committee was told—and this is horrific—that the officials could not tell the committee if and when the Department of Conservation had ever granted access to its lands for the purpose of mining since the 1991 Crown Minerals Act came into effect. This is serious. Property rights are at stake and the future of New Zealand’s mining industry is at stake. That is why National is totally opposed to this shonky legislation.