Q + A - MARCH 31, 2013
ENERGY RESOURCE MINISTER SIMON BRIDGES, INTERVIEWED BY JESSICA MUTCH
JESSICA Good morning, Minister. Thank you very much for your time this morning.
SIMON Morning, Jessica.
JESSICA I want to start off by asking you your predecessor in a speech, Phil Heatley, said, 'I'm determined to ensure the mining sector is not hampered by unsafe protest actions by a small but vocal minority.' You've been working on this since taking over. What are protesters in for?
SIMON So, that's right. So we are acting, and so two offences are going to be put into the Crown Minerals Bill. Look, the first of those is truly criminal offence. Effectively, what it says is that it will be stopping people out there at deep sea, in rough waters, dangerous conditions, doing dangerous acts, damaging and interfering with legitimate business interests with ships, for example, seismic ships, and what they're doing out there.
JESSICA What fines are we talking about there?
SIMON Well, for that one, 12 months' imprisonment, or $1000 (please note: the minister meant $100,000 not $1000) or $50,000 fine, depending on whether you're a body corporate or an individual. Then a lesser, more infringement offence, really, strict liability offence for entering within a specified area, probably up to 500 metres within that ship, again because of the dangers associated with doing that.
JESSICA And this will cover a huge area in New Zealand. Can you outline that for me?
SIMON Absolutely right. So, our Exclusive Economic Zone is the fourth-largest in the world - very underexplored. So what these seismic vessels do is they are monitoring and they are mapping in 2-D and 3-D what is happening under the water and what is happening on the basement, if you like, of the sea floor.
JESSICA These seem like very harsh penalties. Are you basically cracking down on protesters?
SIMON Look, I don't think so at all. This is not about stopping legitimate democratic protest. There are a range of ways people can protest - at a company's front door, on the street, actually still out at sea.
JESSICA But just not at sea?
SIMON Well, no, they still can, but the issue here is we are clamping down on what I think should be seen as properly dangerous, actually reckless, criminal behaviour-
JESSICA Don't we have the right to protest, though?
SIMON that's getting in the way of what someone else is legitimately doing.
JESSICA Don't we have a right to protest, though?
SIMON Absolutely, and properly viewed-
JESSICA Aren't we making it more difficult for people to do that?
SIMON No, I don't think so at all. There are a variety, a plethora of ways that people can protest in this country. As I say, if you have a beef with a particular minerals or oil and gas company, you can do it outside their front door. You can do it anywhere in New Zealand. Actually, you can still do it in the Exclusive Economic Zone, but what you can't do is out in these rough, choppy seas, as we have seen protesters do in relation to Petrobras in this country, go out there and suit yourself in the freezing waters in front of these ships - massive ships, small vessels, exceptionally dangerous. And I don't think-
JESSICA This is just about cracking down on Greenpeace, though, isn't it?
SIMON No, I don't think that's the case at all.
JESSICA Well, $100,000for an organisation - that's pretty hefty.
SIMON Frankly, what's it about is stopping people trying to stop other people going about their lawful business after they have got a permit, gone through the hassle involved with that and are doing something that actually is in the interests of New Zealanders.
JESSICA Isn't this just about putting commercial interests, though, ahead of the rights of New Zealanders? We saw this- the Government doing this with The Hobbit as well.
SIMON No, I don't think so at all. Look, I think what you're seeing is a desire to ensure that really reckless, dangerous acts out hundreds of miles from the shore don't happen. I don't think it's on. I don't think most New Zealanders would think it on. They'd agree with me, I think, that it should be treated as criminal behaviour.
JESSICA Don't you think a lot of New Zealanders would agree, though, that people have a right to protest? Even if I'm not out there with a placard, you still support people's right to be able to do it.
SIMON Absolutely, and I think, you know, that goes to the heart of being a democracy. I believe that passionately. My point is there are a huge variety of ways which New Zealanders can protest about anything. I would never want to stop that, but what they can't do is dangerously, recklessly interfere with other people's rights to go about their business.
JESSICA Did mining companies complain to the Government?
SIMON Oh, there have been complaints. Look, I've talked with a range of businesses.
JESSICA So isn't this just basically a sot to mineral companies and mining companies?
SIMON No, I don't think so. In fact, I think what's also true is this is best practice. You look at Australia, you look at other countries, they already do this. We're also, I think, here filling a gap in the sense that to the Territorial Sea - that's 12 miles out - you already have these sorts of provisions. Even the Exclusive Economic Zone, as I say, a massive area - 4 million-odd square kilometres - there are some provisions for oil rigs and so on. But for these moving vessels, where it was very dangerous and we thought so, that's where we're acting.
JESSICA Was this prompted by the Elvis Teddy case?
SIMON Look, that's certainly part of the genesis of this.
JESSICA Well, that's interesting because Phil Heatley said, 'Protest action played no part in the company's decision to quit New Zealand.' So what does it even matter?
SIMON Well, I think that's right in the sense of Petrobras left for its own variety of reasons, some of those internal to Petrobras and what was going on in its homeland of Brazil and its financial state. But what is also true is the Elvis Teddy case was one with some danger. He was charged in a court that I used to work at, the Tauranga District Court. He went through the process. I think, in fact, in the High Court, an appeal was successful, but it did highlight, I think, quite a lot of legal uncertainty in this area that we wanted to clarify.
JESSICA Because he was interfering with the Petrobras boat basically going out and having a look to see if there were any areas there. He's now going back to court. In the last couple of weeks, that's been announced. Why do we even need to have these changes if this is going back into the court system like it should?
SIMON Well, look, actually, around the same time as that Elvis Teddy case, there were other people, other protesters out there, as I say, many miles offshore, choppy, open seas, getting out of vessels into the cold open sea in front of this vessel. Now, yes, it was expensive and not good for Petrobras, but what is also true is I think it was exceptionally dangerous, reckless behaviour that we don't want to see in this country.
JESSICA Are you basically trying to send a message to mining companies to say, 'Hey, look, don't worry. The Government's got this. We'll take care of the protesters. Come on down and have a look around'?
SIMON No, because what's quite clear, as I've already said, is that there are many ways that Kiwis can protest if that's what they want to do - fill their boots with protest. There are many ways they can do that, but as I say, look, when you're talking about this dangerous kind of activity where lives could be lost, and I'm not putting that too highly, I think it's right that we make it criminal behaviour and seen as criminal.
JESSICA You're clearly looking to help out mining companies. Let's talk about why. What's the potential wealth for New Zealand when it comes to mineral exploration?
SIMON Well, if you go back to that Exclusive Economic Zone-
JESSICA Talking about dollar figures.
SIMON Yeah, sure. I mean, we are talking about a massive, actually, in world terms, underexplored resource. One petroleum basin, Taranaki, has been reasonably well explored. Even that's got pockets still for exploration. We have 17 others. I mean, if you take this on a royalties basis, the Crown at the moment receives some $700 million a year - 42 cents in every dollar of profit in tax and royalties. That pays for schools, hospitals, roads, broadband. You then go down in terms of direct employment - several thousand people in Taranaki.
JESSICA So what could that be? What could that be potentially?
SIMON Well, even if we saw a 50% uptick in a royalties and tax-
JESSICA And is that what you're aiming for?
SIMON You're talking about 12.5 billion. Well, I think we are seeing it, so I think there is incremental activity growth in New Zealand, both onshore in oil and gas, but also offshore. This coming season, over summer, there's some 13 drilling operations going on. Now, that's not the most ever, but it is, I think, an uptick. Look, that's good news, actually. These are very high-paying jobs. I've seen them when I've been around Taranaki, people earning 120, 150 grand per annum, you know, young people. That's the kind of opportunity we want to see, so these young people frankly don't have to go to Western Australia, to Queensland for the sort of opportunities and the sort of pay that they deserve.
JESSICA How will you make sure that New Zealand keeps this revenue? What are you doing to protect that?
SIMON Well, actually, if you look at our businesses, many of them are New Zealand indigenous businesses. The biggest by some way is Todd Corporation, an indigenous New Zealand business, so their revenues stay in this country. But, frankly, if you go through, it's all good news. In fact, I don't think you could find a sector of scale that delivers as much per person. You know, half a million dollars per person is the kind of money we're talking about on average. Huge revenues in terms of royalties, the direct employment. And then I think what Venture Taranaki, the economic development agency there, talks about the multiplier effect, so in a region like Taranaki, we're also talking about engineers, architects, coffee makers, who all receive a very big dividend, if you like, from this kind of activity.
JESSICA You talked about spending that money on schools, on hospitals, on ultrafast broadband. Don't we need to learn, though, from overseas examples? We've seen two very interesting case studies in the UK with the North Sea. They've basically done what we're doing, where they've spent it and then it's gone. In Norway, they've set up a special oil fund and basically just spent the interest off that. Don't we need to learn from that example? Is that something that you're looking at?
SIMON In the mixed-ownership model, of course, we have said we'll have a future investment fund where those funds will go-
JESSICA I mean specifically for energy.
SIMON Look, that's not something we're looking at at this time. I mean, I think what is true is those royalties and taxes go back to the Crown, they do go into the general coffers so we can pay for the sort of things that New Zealanders expect and deserve.
JESSICA Once it's gone, though, it's gone. Don't we need to protect that future investment?
SIMON Look, I think the point of the matter is we are relatively underexplored both onshore and offshore. There is a lot of opportunity. I wouldn't pretend for a second it's some sort of silver bullet for this country.
JESSICA So we we're going to basically spend it and then squander it?
SIMON Well, there's nothing about this that is short-term, actually. So if you're talking about a permit today for exploration - the kind of thing I was talking about, out at deep sea - it will be several years before they look at drilling. Those drillings, by the way, I should say, cost somewhere between $100 (million) and $150 million a pop at deep sea with sometimes a 20 per cent chance of success, so it's risky business. Nothing's certain, but, you know, frankly, I'd say to New Zealanders we should be exploring these sorts of opportunities.
JESSICA But you're basically not giving any guarantee that there will be anything protected for the future when it comes to us?
SIMON Look, certainly that money will be spent by New Zealanders for New Zealanders.
JESSICA But it won't be saved or invested?
SIMON I'm not thinking at this stage of some sort of specified fund, no.
JESSICA I just want to talk now- basically we've had a few examples in New Zealand - we've had the Tui Mine, we've had in Waihi the Martha Mine, where taxpayers and- also to a certain extent, the Rena as well, where taxpayers have been left to clean up the mess. How can you guarantee that New Zealand taxpayers won't have to clean up if something goes wrong?
SIMON Look, it should be user pays, and that's absolutely the principle that I think is right. I think what is also true - we have learnt a lot from some of the experiences you've talked about. Also, look, let's be frank about this, what happened in the Gulf of Mexico. I mean, at a range of levels we are, I think, systematically improving our regulatory regime across the Crown Minerals Act, EEZ law, RMA. I could go on. Also in technology - it's gone a long way. President Obama's actually shown some leadership there - capping technology. That means that these sort of technologies are much safer than they perhaps have been. So I suppose what I'm saying to you is prevention is better than cure. We really actually put industry through the wringer before they can even think about drilling to make that this is very, very safe.
JESSICA And that's a nice place to leave it. Thank you very much, Minister Simon Bridges.