Parliamentary Commissioner for the Environment - Te Kaitiaki Taiao a Te Whare Pāremata

Submission on the Schedule 4 stocktake discussion document

27 April 2010

Introduction

I have been the Commissioner for the Environment for a little over three years. My introduction to the quagmire of our mining legislation began last year when I released a report on the Stockton mine. As I reached the final stages of the Stockton report, the issue of mining on conservation land entered public debate.

So it was with considerable interest and good grounding that I read this current discussion document. I have taught many graduate students here in New Zealand and in the United States, and I have certain expectations as to how a coherent argument should be made. This document falls short of that. This issue is too important to rely on inadequate information.

I am certainly not against all mining in New Zealand – like everyone else I benefit from the end products of mining every day. But what is being mined, where it is being mined and how it is being mined are all crucial questions.

I will be further exploring these questions in a more extensive report on mining on conservation land that I expect to release around the middle of this year.

1 Questions one, three, and four: Areas for removal and assessment of values

Schedule 4 was passed by Parliament to safeguard New Zealand’s high-value conservation areas. Because of the high conservation value ascribed to Schedule 4 lands, any consideration to remove that protection must meet a high threshold. The onus therefore is on the Government to prove beyond reasonable doubt that the mineral values below the land justify the risk to the conservation values above the land. The information contained in the MED discussion document does not meet this test.

Purpose of Schedule 4

The purpose of Schedule 4 is to protect high-value conservation areas from mining. Schedule 4 was strongly supported across Parliament when it was passed in 1997. It was recognised as a pragmatic way to give both miners and conservationists certainty about what conservation land could potentially be mined.

Schedule 4 sought to minimise[i]:

• wasting central and local government resources, by making it clear from the outset which land has such high conservation value that it should not be considered for mining
• the conflict between mining and conservation, by creating clear assurances to both sides about what land is not open for mining

Removing Schedule 4 protection must meet high threshold

Any case to consider removing Schedule 4 protection must meet a high threshold. There must be evidence that shows beyond a reasonable doubt that the potential mineral value justifies the risk to the high conservation values.

The onus is on the Government to establish this conclusively. The evidence provided in the discussion document on both the conservation and mineral values is vague and rudimentary.

There also needs to be clear transparency as to the criteria used to judge the relative values of mining and conservation on the land in question. The criteria used for judging these values in the discussion document are not explicit.

The areas proposed for removal from schedule 4 lie within five areas:

• Paparoa National Park
• Coromandel Peninsula – main peninsula area
• Great Barrier Island
• Otahu Ecological Area
• Parakawai Geological Area

The assessment of conservation values for each of the areas proposed for removal lacks:

• Any quantitative data on the distribution of threatened species or ecosystems
• Any analysis of the risks to conservation values from prospecting or mining.

Example: The document should have assessed national threat classifications[ii] to determine if any high-conservation value species (such as those classified as ‘nationally critical’ or ‘nationally endangered’) occur in the areas proposed for removal. Information on the distribution of threatened species could then help determine the risk to these species from mining. For instance, is only 5% of the population of a threatened frog present in the area, or is 60% present?

In terms of the mineral value potential, inadequacies include the fact that:

• The amount of minerals are estimated using broad-brush methods based on little data from exploration and prospecting[iii]^,[iv]
• Economic values do not include the cost of extraction
• The assessment of mineral potential lacks sufficient depth.

Example: As well as discussing the potential value of the minerals, the document should have clearly laid out the probability of actually finding an economic deposit. The assessment of Great Barrier Island illustrates this: The island is described as having “excellent mineral potential”. But what is not discussed is that the supporting expert analysis relies on a highly speculative assumption, namely that previous exploration missed the main gold/silver vein.[v] The analysis also says that realising any potential will require significant financial investment.

The Government must provide the public with sufficient evidence on mineral and conservation values if it wants to make a case for taking any land out of Schedule 4. How this information is collected (whether by encouraging private exploration or directly investing itself) is up to the Government. Until clear information is presented that establishes a case, removing Schedule 4 protection from the above land should not be considered.

I recommend that:

The Minister for Energy and Resources and the Minister of Conservation do not remove any of the specified areas from Schedule 4 as the provided information falls well short of establishing that the value of the minerals to New Zealand justifies the risk to the conservation value of the land.

2 Question two: Additions to Schedule 4

There are 14 areas proposed for addition to Schedule 4. These areas clearly fit within the classifications covered by Schedule 4 of the Crown Minerals Act 1991. If Schedule 4 was being implemented as it was likely that Parliament had intended, then new eligible categories would be automatically added.

Clearly these lands should now be added to Schedule 4. Moreover, these additions should not be regarded as a quid pro quo for the areas proposed for removal.

Automatic addition to Schedule 4

The Department of Conservation evidently initially interpreted the Crown Minerals Act to mean it would automatically protect any land reclassified to fall within a definition covered by Schedule 4 (e.g. National Park, Nature Reserve).[vi] It seems this was also the intent of Parliament when Schedule 4 was passed in 1997.[vii]

However, it was found that because of ambiguous wording in the Crown Minerals Act[viii], additions were not automatically protected.[ix] This meant that Schedule 4 could be interpreted to only cover those lands with the appropriate classification at the commencement of the Crown Minerals Act 1991, that is the 22 of July 1991.

This ambiguity should be rectified so all eligible land is protected by Schedule 4. It is not logical to assume that Parliament did not want to extend Schedule 4 protection to any future additions to those categories.

There is a legitimate question as to whether the process of giving Schedule 4 protection to categories of land, rather than parcels of land is appropriate. That is however an issue beyond the scope of the questions being answered in this submission.

I recommend that:

The Minister for Energy and Resource and the Minister of Conservation resolve the ambiguity in the Crown Minerals Act that prevents eligible land from being automatically entered into Schedule 4.

3  Question five: conservation fund

Question five asks for comment on a proposed conservation fund, generated from royalties on conservation land. This fund should be allocated by appointees of the Minister of Conservation and should not be capped. Further, it should not be used to pay for mitigating the environmental impact of mining; these costs should be borne by the mining companies.

Fundamental design features

The discussion document presents two important design features for the conservation fund. These are that the fund:

·  is additional to current conservation funding

·  is not used to mitigate the effects of mine sites or be used for compensation. Levels of mitigation of mining impacts should be decided on a case-by-case basis, should be paid for directly by the mining company, and should have no financial cap.

These features are fundamental to the integrity of the conservation fund. It is also important that the fund is not restricted to public conservation areas. Lowland ecosystems, which are often on private land, are under-represented in the conservation estate.

Administering the conservation fund

The discussion document proposes that the fund should be run by an independent panel appointed by the Minister of Energy and Resources and the Minister of Conservation.

To ensure efficient use of resources the fund should be run by DOC under the direction of the Minister of Conservation.

DOC already has the organisational expertise, and administers a number of contestable funds. Given this, it seems wasteful to set up another body (the independent panel) to administer the fund. Instead, DOC should administer the fund, although the fund would need to be ring-fenced to ensure transparency and clear direction given to consider conservation values on private as well as public land.

However, if an independent panel is set up, its members should be appointed by the Minister of Conservation alone. It is inappropriate for the Minister of Energy and Resources to play any involvement in appointing people with conservation expertise to such a panel.

The broad objective of the conservation fund (“to enhance conservation outcomes for New Zealand”) is appropriate. The conservation fund should complement contestable funds that are already allocated in accord with the New ZealandBiodiversity Strategy (2000) and be additional to existing funds.

The conservation fund should not be capped

The discussion document states that 50% of the royalties from mining on conservation land be put in the conservation fund. It also sets minimum and maximum contribution levels.

The proposed minimum level of $2 million per year is an appropriate starting figure, given the size of royalties likely to be received from mining in the future.[x]

The cap of $10 million per year for the fund is not however appropriate. The fund should not be capped and should increase in line with the level of mining.

I recommend that:

Cabinet ensures the proposed conservation fund:

·  should be administered under the sole direction of the Minister of Conservation

·  should be administered by DOC to avoid wasting resources by setting up an independent panel

·  should not be used to pay for mitigating the environmental impacts of mining

·  should not be capped

4  Question six: Joint approval for access

The discussion document proposes a joint Conservation and Energy ministerial approval process for access to Crown land. Currently the approval for access is granted solely by the Minister of Conservation for very good reasons. It is extremely important that this does not change.

No joint approval for access

Currently the landowner’s property right is protected through the right to grant access for mining activities. The Minister of Conservation as the landholding Minister of conservation land must retain the sole and final say over access to conservation land.

There are two key reasons for this:

1. A key principle in the Crown Minerals Act 1991 is the distinction between the property rights of the owner of the land and the Crown as owner of the minerals.[xi] Amending the Act as proposed undermines this fundamental principle. If extended to private land as would be logical, it raises the scenario of private landowners having to do deals with the Minister of Energy and Resources over access to their own land.
2. A joint decision-making approach will dilute the role of landholding Ministers, whose responsibility is to ensure that the purpose for which the land is held and managed is appropriately protected in any negotiation for an access agreement. This has implications for how Ministers discharge responsibilities under other legislation (e.g. National Parks Act).[xii]

The discussion document also presents no reasons as to why a joint approval process is needed. 90% of all mining applications to access conservation land have been granted.[xiii]

I recommend that:

Cabinet does not agree to a joint approval process for access to conservation land. This should remain the sole domain of the Minister of Conservation.

 

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