Woods MeganHon Dr MEGAN WOODS (Minister of Energy and Resources): Thank you Madam Chair. I will speak to the member's Supplementary Order Papers (SOPs) 87 and 89 and give an indication to the committee of why we won't be supporting either of those. But I actually think in fairness to our oil and gas industry that there's a point I need to clarify from the speech from the previous speaker Barbara Kuriger. I have never heard any of the women or men of our oil and gas industry come into my office and say they should not have to fulfil their statutory obligations because they pay for swimming pools or that they should not have to fulfil their statutory obligation because they donate some money. I have never heard one of them say that they don't recognise that they have obligations under their licences to uphold their end of liability for decommissioning and I think that to suggest otherwise actually does a disservice to the men and women who work in our oil and gas industry.So I take the SOPs that we won't be supporting that the member has put up and the first is SOP 87 in the name of Barbara Kuriger. This is the amendment that seeks to remove the trailing liability provisions from the Act. We won't be supporting this. We consider that perpetual or trailing liability is an appropriate response to the trends observed both overseas and here in New Zealand. I think one of the things that we have to recognise is that in the oil and gas sector New Zealand does not exist in a vacuum and there is a lot of working going on internationally around what provisions need to be put around it. While the New Zealand petroleum sector differs in many ways from some overseas jurisdictions the policy driver for the provision that we're talking about here in fact has a lot in common with overseas jurisdictions that we would look to.It's important to consider all views around perpetual liability in the context in which the bill intends it. The provisions are designed to only be used in the case of the last resort where the current permit holder cannot carry out and fund decommissioning. So I think it's important to read the detail of what it is that is being established under this legislation. The provisions are already limited in the way they only apply to wells and infrastructure present at the time of transfer. So there is a lot of detail that I think the member needs to go back and have another look at.In terms of the onus on directors and the criminal penalty that will apply to directors this is a penalty that is reserved for only the most serious of cases where directors knowingly act to fail to meet decommissioning obligations. That is a very high test—knowingly act to fail to meet the decommissioning requirements that occur both under statute and in many cases within the individual purpose. So I think we need to understand when it is that these provisions will be applied. The bill provides defences for directors if they can demonstrate that they took all measures to ensure the business could meet its decommissioning obligations or that there were situations that prevented their actions. This is a provision of criminal liability for those directors who knowingly seek to shirk their responsibilities for decommissioning and instead leave New Zealand taxpayers paying the tab and I don't there are many fair-minded New Zealanders that would see that as something that is an overreach. I think they'd be thankful that this is a provision and a protection that we are giving them under law.An amendment of course as the member will know was made at the select committee to limit liability so that a director could only be liable for criminal prosecution if they were a director of the current permit holder at the time the breach occurred. So I think there has been some work done on that provision and for that reason I'm satisfied that it is appropriate and it is proportionate and it is the right thing for the Government to do. So we will not be supporting SOP 87. Neither will we be supporting SOP 89 in the name of Barbara Kuriger. This is the associated civil pecuniary penalty that this ones speaks to. The post-decommissioning obligation is an important provision in there to protect taxpayers from expenses incurred from work required to wells and infrastructure over the years and decades after decommissioning has been completed. Subpart 3 of the bill requires permit and licence holders to pay into a fund to provide a financial security to address issues related to the monitoring maintenance and remediation of wells and infrastructure left in situ after decommissioning has been completed and in practice it's likely that Government agencies will be left to carry responsibility for monitoring and remediating decommissioned wells and infrastructure. It's appropriate that those who have benefited the most from the petroleum production should financially contribute to this work. I think that that passes a pretty clear fairness test and I do note for that member's assurance that this post-decommissioning regime for decommissioning wells and infrastructure are well established in other jurisdictions—certainly other petroleum and gas producing jurisdictions that New Zealand would look to: Norway Canada and the United Kingdom. So this really is bringing New Zealand more into line with those more developed regimes that we see in those countries.