Woods MeganCROWN MINERALS AMENDMENT BILLSecond ReadingHon Dr MEGAN WOODS (Minister of Energy and Resources): I move That the Crown Minerals Amendment Bill be now read a second time.This bill amends the Crown Minerals Act 1991. The purpose of the Crown Minerals Act is to provide for the efficient allocation of rights to prospect for explore for and mine Crown-owned minerals and the effective management and regulation of those rights. It also provides for the carrying out of activities in respect of those rights in accordance with good industry practice and a fair financial return to the Crown for the development of its minerals. This Government is committed to ensuring that the regulatory system that manages New Zealand's Crown-owned minerals and the permitting regime that underpins these sectors is robust and fit for purpose.This bill seeks to clarify and update statutory provisions and addresses gaps inconsistencies and errors with the Act. The changes in the bill will ensure that the identified regulatory gaps are closed it will ensure there is a clarity for regulators and for industry around permitting and it will address inconsistencies in the Act.The nature of the petroleum industry is changing. There has been an increasing amount of acquisition and divestment activity across the sector. These transactions reflect a global trend of consolidation and rationalisation by large companies and smaller companies buying mature oil fields with the extension of extending end-of-life fields using specialist expertise. These are existing permits and these will stretch for decades into the future. It is important that we make the most of these as we ensure a managed just transition to a net zero emissions economy.It is therefore important that the Crown manages the risks that changes within the petroleum sector can bring by retaining appropriate oversight of acquisition and divestment activity in the sector. Under the Act any change of permit operator requires the prior consent of the Minister of Energy and Resources or a delegated authority. A change of permit operator occurs when the day-to-day management of a permit changes from one permit participant to another. However under the current legislation a change of control of permit operator does not require prior ministerial consent. A change of control of a permit operator occurs when the majority voting rights for a corporate body are transferred. This is not in line with the intent of the Act as it allows companies to transfer operator responsibilities with reduced Crown oversight.This bill closes this gap in the legislation. The amendment ensures that the Minister of Energy and Resources has oversight over appropriate transactions in the sector. It also ensures that the Minister must be satisfied that a change of control of an operator will not affect the permit holder's ability to comply with the agreed work programme.The bill also provides clarity around clauses in the Act which could be interpreted in multiple ways or where the meaning of the clause is unclear. Legislation that is unclear may lead to confusion and unnecessary administrative burden for those regulating the sector and the sectors themselves. The clear regulatory system provides a stable base for the Government and industry to work together in a cohesive manner and will ensure New Zealand's regulatory system works effectively.Finally the bill addresses provisions in the Act where the wording is inconsistent with either another Act or where it is inconsistent with the purpose of the provision. Inconsistencies can create an unnecessary administrative burden for those reliant on this framework and they can decrease the efficiency of the system.The Economic Development Science and Innovation Committee have examined the bill and have unanimously recommended that it be passed with amendments and I'd like to acknowledge and thank the members of that committee and the chair Jonathan Young for their hard work and consideration of the bill. I'd also like to thank all those who made a submission on the bill. I support all the changes recommended by the committee and I would like to briefly comment on some of the more significant changes. The bill as introduced did not expressly provide for a situation where a change of control of a permit operator was commenced but not completed prior to the new provisions in the bill coming into effect. This could result in an unintentional breach of the new provisions of the Act. The committee has recommended inserting a new clause into the bill which would confirm that the current law will continue to apply to transactions entered into before the new provisions commence. This will give certainty and clarity to commercial transactions currently being undertaken.The bill sets out how consents should be obtained for a change of control of a permit holder holding a tier one permit and what would constitute a contravention of a consent process. The bill currently states that if a person knows or ought reasonably to know that they have obtained the power to exercise or control the exercise of 50% or more of voting rights of a permit operator without the prior consent of the Minister they can be convicted of an offence under [the Act]." The committee has recommended that it be made clear that "a person can only be convicted of an offence if they knew or should have reasonably known prior to the change in control that they will obtain [that] power."There was concern raised in submissions that a person might be unduly penalised if a late application was properly made but the Minister has not made the decision before the change of control takes place. The committee recommended clarifying that a person cannot be charged with an offence while their application is still under consideration and will only be in contravention if their application is denied.This is a Government that is committed to a just transition to a net zero emissions economy. The recent changes that we have made to the Act to halt future offshore oil and gas exploration permits are a signal from this Government so the industry and New Zealand can begin that transaction. We acknowledge there is a need to look at the wider Crown Minerals Act and ensure that it is futureproofed to meet the needs of all New Zealanders. That is why we will shortly be undertaking a wider review of the Act which will involve engaging with iwi and other key stakeholders on how New Zealand can sustainably derive value from its resources. As I have said publicly a just transaction means that the existing work programme of permit holders won't be affected regardless of the decisions that've been made on the future of the oil and gas industry in New Zealand. This means that our current regulatory system must continue to effectively manage permits that are currently in place. To do this the legislation must be robust and up to date.This bill will ensure that the regulatory regime that governs our Crown-owned minerals is fit for purpose. The bill will close gaps clarify unclear provisions and address inconsistencies currently in the Crown Minerals Act. This will ensure that we do have a regulatory system that remains effective and efficient while at the same time providing clear and transparent expectations to the industry. Our goal is to have minerals and petroleum industries that responsibly deliver value to New Zealand and the amendments to this bill will help us to achieve that. I commend this bill to the House."