Muller Todd: Exclusive Economic Zone and Continental Shelf (Environmental Effects) (Transitional Provisions) Amendment Bill — Second ReadingText is incorporated into the Bound VolumeMuller Todd: Exclusive Economic Zone and Continental Shelf (Environmental Effects) (Transitional Provisions) Amendment Bill — Second Reading[Sitting date: 16 June 2015. Volume:706;Page:4428. Text is incorporated into the Bound Volume.]TODD MULLER (National—Bay of Plenty): I rise to make some concluding remarks in the second reading of the Exclusive Economic Zone and Continental Shelf (Environmental Effects) (Transitional Provisions) Amendment Bill and I ask the House whether I can perhaps refer to it as just the bill from now on. The bill makes a small technical amendment to the Act to ensure a sensible transition of existing petroleum operators into the new regime. We have four petroleum production operators in the exclusive economic zone all off the coast of Taranaki—that fantastic area whichis of course incredibly well served by Barbara Kuriger—and all crucial for New Zealand’s oil and gas supply. All of them have been operating well but need to be brought seamlessly into the regime without compromising their supply. The current transitional provisions in the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act require existing operators to undertake the marine consenting process before their pre-existing permits expire. This bill allows simply for operators to continue operating while their new marine consent applications are being considered by the Environmental Protection Authority.The bill also provides certainty of operation throughout any subsequent objections and appeals andthat is of course potentially where we are with Shell Todd Oil Servicesat the moment. I think what is really important though is to note that the bill does not change the requirement to apply for a marine consent. Operators are still required to provide an impact assessment on the nature of their activities and are still required to identify measures to avoid remedy or mitigate any adverse effects.The select committee spent quite a lot of its time reflecting on the transitional provisions particularly section 162 of the current Act. If I can quote from that Act it allows existing petroleum mining activities involving structures or pipelines that are permitted under the Crown Minerals Act regime to continue without a marine consent for the duration of the operator’s mining permits or privileges as they were on the day before that Act came into force. But critically it does not allow existing operators to continue their activities while a marine consent application is being considered and any appeal is being determined. So as you would expect that was a challenge for us and we needed to resolve that. We cannot have situations where essentially existing operators need to have been granted a marine consent before their mining permit or privilege expires and they find themselves potentially continuingto operate in breach.We spent quite a lot of time as a select committee reflecting on whether the current operators could essentially game the framework in any way by delaying the time of their application for a new permit and consent until the very last moment and then tying up the review process in years of legal wrangling. I guess there was a legal perspective that was brought to the debate byboth members of the committee and those who were providing submissions but also I think that at times the debate lacked commercial rigour. From my perspective—just reflecting on some of my experience in recent years particularly with Fonterra—the idea that you would deliberately wait until the very last minute to put in an application when you have such a significant part of your business at stake which is being enabled by a particular consent or permit is very unlikely. Certainly from my experience it just simply does not happen because the business continuity risks are significant and if you are in the commercial world your senior management and indeed your governors hold your feet to the fire to ensure that you are managing your regulatory compliance—particularly any consents and the rollover of those—in a way that absolutely assures business continuity. So some of the debate in the select committee around the fact that somehow our oil and petrol - producing companies would be gaming this by trying to wait until the very very last minute simply did not wash with me.We did amend clause 4 of the proposed bill which amends section 162 of the principal Act to require existing operators to apply for a marine consent 9 months prior to the expiry of their permit and for that application to be acknowledged as complete by the Environmental Protection Authority. There was quite a lot of debate as to whether this should be 6 months 9 months or 12 months. I think we have landed in the right spot. Actually I think the credit for that should go to our chairman Mr Scott Simpson who has shown yet again that he has a very good way of managing a process reflecting on the various perspectives in the room in order to get the right outcome in terms of the legislative outcome. I think that we have got an outcome here that will work quite well. We have amended clause 4 further by putting in new section 162(5) to clarify that existing mining activities that are past the expiry date of a mining permit or privilege can continue until the application is decided by the Environmental Protection Agency and appeals are determined and I think that is very useful.Perhaps the only closing comment is that we had a number of submitters. Most of them were perhaps light in terms of understanding the details of this. The Petroleum Exploration and Production Association of course was not very supportive of change but I think one message it could take away from our select committee deliberations is that it does have a role in my view in working with the oil companies to ensure that they are very aware of their obligations in terms of timing and sequencing of their particular consent renewals. There was just a touch of a hands-off approach from the Petroleum Exploration and Production Association which I think did not serve it particularly well. I look forward to this bill progressing through the House.