Court Simon; Smith Stuart; Woods MeganSIMON COURT (ACT): Thank you Madam Chair. Minister thank you—a fascinating insight! And just to bring to your attention during a debate on the former bill a Labour MP also used Google to access information during the debate. So this is across the House the use of information technology and I'm sure the Minister would welcome that.Minister a couple of things: you have raised the issue of record low coal imports and we assume that relates to a reduction in the need to consume coal for energy and electricity production. So I would always be interested because you have introduced it into the debate in how much of that is related to the fact that we've had an extraordinarily wet year and that the hydro dams are currently 110 percent full.CHAIRPERSON (Hon Jenny Salesa): Order! I would like the member to come back to a question that's within the scope of this bill.SIMON COURT: Certainly. Well I shall then. The Minister has raised the issue of critical minerals. The Minister has identified that the minerals that have been mentioned whether they're gold silver platinum titanium selenium which is used as an agricultural input—all kinds of minerals are available in New Zealand. But in other jurisdictions Minister—like Australia for example the UK the US and Canada—they've identified a list of critical minerals. Now in the debate previously in response to a question you mentioned critical minerals. Minister these other jurisdictions have identified a critical minerals list that would help a Government agency making decisions about permit applications and how they are viewed against whether the minerals that are proposed to be extracted are critical or not. And there are a whole lot of minerals that only exist in a few places around the world. Rare earth elements for example Minister—they go into batteries they go into electronics they're absolutely vital for satellite communications cell phone communications. Minister what progress has this Government made on a critical minerals list? I understand it's on the work programme. And how will the criticality of minerals be given a weighting when applications in terms of clause 5 Section 5 amended (Functions of Minister)" when a Minister is weighing up permit applications and whether they should be approved? Thank you Minister.STUART SMITH (National—Kaikōura): Oh thank you Madam Chair. Actually Simon Court makes a very good point and I think that it's well worth exploring because what we have seen internationally has been a reluctance in the developed world to mine and to process minerals within their own borders. They have effectively exported that mining and the processing of those elements and minerals that are vital for a transition to low emissions to places like China where actually the labour laws are very scant at best. In fact the American President Joe Biden passed an executive order which effectively made it that any products that come from Xinjiang in China would be required to have an assurance that no forced labour was used in the making of those materials. And for the Minister's benefit if she's not aware over 70 percent of the world's polysilicon is actually processed in Xinjiang and made into polysilicon ingots. Sometimes it's further processed and made into the wafers and in other cases it's exported to other nations to be made into those wafers. But what often happens is in the step before that some polysilicon goes into Xinjiang and is then blended with the material being processed there. So effectively if the solar panels have polysilicon in them and polysilicon for other uses it's pretty hard to ascertain whether it came from that country with forced labour and where forced labour may have been involved in that.Now I've asked questions about this but I get the answer that "Well we've got forced labour regulations." Well the Americans did too but the President has gone another step—a significant one step further. It won't cover it all for the reasons I just outlined but did the Minister put any thought into that when she was having this bill drafted and the instructions to the officials and the drafters? Because it appears to me this does make it more difficult. This does slow it down. It makes it more likely that the rare earth elements as Simon Court mentioned and other minerals that we use in everyday life now are not just used—I will cover this further in my third reading speech but it's surprising where some of these minerals are used in products that people—Hon Jo Luxton: The question?STUART SMITH: —would not understand. I think someone's trying to be a chair over there by the sound of things—I distinctly heard that but anyway. So I'd really like to know if the Minister did take that into consideration. We did hear from her previous contribution—we now know what the Minister does in her spare time: she watches back episodes of Yes Minister. There was a very good impression of Sir Humphrey with the answer that she gave to my colleague Erica Stanford and I thought that was quite good actually almost an Academy Award performance. But the Minister if she could just come back with those answers that'd be much appreciated.I have another question as well. Under clause 14 we will replace section 41(6) with "(6) Before mining granting consent the Minister must be satisfied that the transferee is highly likely to be able to comply with—(a) the conditions of and give proper effect to the permit; and (b) in the case of a permit as defined in section 89D the relevant obligations in subparts 2 and 3 of Part 1B." Well aren't they just required to meet those things? Why is it that "the Minister must be satisfied"? Has that been outlined anywhere else in legislation around mining or any other activities that they "must be satisfied"? And is "must be satisfied" a high enough bar to achieve whatever it was that the Minister was trying to achieve from that particular clause or was that not one that she actually insisted on? Is that just one that came up? Where was the legislative gap that required clause 14 to be inserted into this bill?SIMON COURT (ACT): Thank you Madam Chair. Minister I want to come back to clause 5 "Section 5 amended (Functions of Minister)". Because right now as the Minister of Energy and Resources you would have the most current and up-to-date experience with the functions of the Minister exercised under this Act. So Minister I want to ask—when it comes to "The Minister has the following functions" in the current Act this bill proposed to modify section 5(a). So instead of the functions of the Minister are "to attract permit applications [for Crown mineral extraction] including by way of public tender"—in other words a Minister to act as an advocate; a business development function for Government. Imagine that. Instead of the Minister acting in that role trying to drum up more business the Minister will instead be required "from time to time [to] offer permits for application". "From time to time". So instead of "to attract permit applications"—which sounds like business development; getting New Zealand going—"it's from time to time offer permits for application".So Minister I'm interested. I'm sure those who might want to take part in resource development in New Zealand or invest in resource development are interested. I'm sure the engineers the scientists the geologists all the digger drivers all the jumbo operators—everybody who works in mining in New Zealand—would be interested whether the Minister considers what times "time to time" covers. Does it mean annually? Does it mean every few years? Does it mean when the Minister wants to announce something and so goes somewhere to a small town—maybe on an election campaign—and announces this is now the time we'll open applications for permits? What is this "time to time" Minister; and on what basis will "from time to time" permit applications be made available?Because having all of this power delegated to the Minister to essentially handbrake—essentially throw sawdust into the transmission of—a vital economic activity which is resource development Minister—if it's not a priority for this Minister or a future Minister "time to time" could mean well almost never. Because when you combine the purpose to be amended with "promote" gone "manage" in; and then "attracting permit applications" gone. No more business development no more New Zealand open for business. But "from time to time" we might make a permit application process available.That really sounds like this Government is proposing to slowly strangle the life out of resource development—out of the gold mining out of all of that other valuable extraction that goes on in New Zealand right now. In fact I understand that gold exports to Australia are only second after wine in terms of their value—only second after wine. Who knew that New Zealand's second-largest export to Australia is gold?Yet this Minister doesn't really seem to have provided confidence to the industry to the towns where these activities take place to all of supporting manufacturing sector that supports mining activities around New Zealand whether it's in Otago or Coromandel; Waihī or on the West Coast of the South Island; or Waikato for example where they do coal mining; or Port Waikato where they recover and mine ironsand at Tahāroa and turn it into steel at Glenbrook.Minister "from time to time" sounds like "when the Minister gets around to it" and what this Government have signalled is that they're not really interested in getting around to helping business unless it involves handing out money for green projects like an electric arc furnace here or money for a wood-fired boiler somewhere else in order to get some headlines. So Minister would you explain what you think the implications are of switching from "attract" to "time to time"; and what criteria you would make or a Minister would make to determine when the time is?Hon Dr MEGAN WOODS (Minister of Energy and Resources): By my count there's probably three areas of questions that are currently under way.First of all there was a question from the member that's just taken a seat Simon Court in an earlier call around the work programme in terms of the critical minerals list. As the member has rightly identified this is work that our Government currently has under way and it is work that is progressing. It is work that a future Labour Government after the election will certainly be looking to further progress. It's been a priority for us. We established this programme of work under our Government. It's not work that was under way when we came into Government so it's work that we have been able to progress there anyway. Not that that is particularly relevant to the legislation that we have in front of us. It isn't seeking to make any changes that would impact on that.The second line of questioning—I'll go through an order of the clauses that have been brought up on the bill. So there's clause 5 which the member that's just taken his seat has asked around the impact of section 5 and how that will operate. Well section 5 as it is in the primary legislation in the Crown Minerals Act currently requires the Minister to "attract permit applications including by way of public tender". This is interpreted in the minerals programme as an expectation that there will usually be an annual petroleum exploration permit round or a block offer.So if you put it together there's been three tranches of Crown Minerals Act (CMA) reform. Of course we made the initial tranche 1 changes that needed to be made immediately after we made the decision to end offering offshore oil and gas exploration permits. That was the immediate change and the commitment was that we would go through a fuller process for the longer-term changes that needed to be made.So the clause the member is talking about in his talk about gold isn't really relevant because this is about the interaction that is there in terms of the block offer or the petroleum exploration permit round and the interaction there. Clause 5 of the bill alters the function of the Minister from "attracting permit applications including by way of public tender" to "from time to time to offer permits for application by public tender". This is done to remove the expectation that there will be that annual block offer as a matter of course. It will enable more discretion in the timing and frequency of future block offers if there were to be any. Because as the member will know prior to the changes that we made under the petroleum programme there was the expectation of the annual round of block offer.The other clause of the bill that there has been some questions about of course is clause 14 of the bill and this is around decommissioning. So when I say "tranche 3" this is what we would formally call "tranche 2" of the changes to the CMA but we did do the immediate work that we needed to do around decommissioning. This was really in the wake. We've made two changes around decommissioning. There was a hole that we had to plug when we immediately came into Government around the provision of permits.We found when we came into Government there was a big wide open door that had been left by the previous Government which resulted in the taxpayers of New Zealand having to pick up a bill of hundreds of millions of dollars for decommissioning of a project that they never should have had. This was the responsibility of the permit holder but adequate protection for taxpayers had not been put into previous changes of the legislation. So we brought changes to the House to protect the taxpayers. This is further strengthening those decommissioning provisions that need to be there.One of the holes that was left was actually the ability of a transfer of a permit to have the same level of scrutiny as the granting of a new permit in terms of their ability to pay for their decommissioning. I think everyone should—most right-minded people would—agree that if someone is coming in to do business in New Zealand by way of extraction they have the ability to actually finish the process and pay for their own decommissioning and not leave the taxpayers of New Zealand holding that bill.So this is further strengthening around those provisions there. It was made for consistency with other provisions that are being made with this bill just to make sure we've got that belts and braces to the protection of New Zealand taxpayers."