Petroleum and minerals regulatory system

This page describes the petroleum and minerals regulatory system, its objectives and our qualitative assessment of it. It also lists the main statutes and changes to regulation either planned or in progress.

System description and objectives

The petroleum and minerals regulatory system sets out the framework for managing the Crown minerals estate, and leading development and regulation of New Zealand’s petroleum and minerals resources. Under the Crown Minerals Act 1991 (CMA), the regime promotes prospecting for, exploration for, and mining of Crown owned minerals (including petroleum) for the benefit of New Zealand.

Crown-owned minerals include petroleum, gold, silver and uranium, and minerals on or under Crown land. In some cases the Crown also has rights to certain minerals in some private land. There are also some cases of private mineral ownership on or under Crown land.

The objectives of the system are to:

  • efficiently allocate rights to prospect for, explore for, and mine Crown owned minerals
  • effectively manage and regulate the exercise of those rights
  • ensure activities in respect of those rights are carried out in accordance with industry practice
  • ensure a fair financial return to the Crown for its minerals.

This system excludes the regulation of energy markets and competition. The system overlaps with the health and safety regulatory regime.

An Aotearoa New Zealand Resource Strategy is being developed in 2019 to underpin a review of the Crown Minerals Act 1991.

The strategy will focus on the Government’s long-term vision for the petroleum and minerals sector and will provide the sector with stability and certainty.

It will provide for targeted engagement with iwi partners and stakeholders including industry and environmental groups on how New Zealand can sustainably derive value from its resources.

The CMA is currently under review to ensure it remains fit for purpose. MBIE intends to release a discussion document in the second half of 2019 for public consultation.

Ministerial portfolio and key statutes

Portfolio Key statutes

Energy and Resources(external link)

  • Crown Minerals Act 1991
  • Ngai Tahu (Pounamu Vesting) Act 1997

Regulatory agencies and their roles

Agency Role

MBIE

We are the steward of the petroleum and minerals regulatory system. We are also responsible for permitting (allocation, compliance and administration), both on and offshore.

Department of Conservation

Administers access to conservation land for mining activities that require an access arrangement approved either:

  • by the Minister of Conservation, or
  • jointly by the Ministers of Conservation and Energy and Resources – this is required for tier 1 permits (ie for petroleum and high-value minerals).

Territorial authorities and regional councils

Regional and local environmental regulators which, through planning documents and consenting, set localised rules around where mining activities can occur and conditions or requirements that need to be met in establishing, operating and decommissioning or rehabilitating mining operations.

Land Information New Zealand

Responsible for access arrangements for Crown land it administers.

Environmental Protection Authority

Environmental regulator of the Exclusive Economic Zone and Continental Shelf which, through planning documents and marine consents, controls mining activities outside of the 12 nautical mile territorial sea limit.

WorkSafe NZ

Responsible for overseeing health and safety of mining activities

Maritime NZ

Manages and responds to any significant offshore oil spills

Collaboration and information-sharing between regulatory agencies

MBIE meets often with other regulatory agencies on an ad hoc basis.

In some circumstances, regular meetings also occur. For example, a quarterly petroleum regulators forum is held between MBIE, the EPA, and the Taranaki Regional Council.

Regulated parties and main stakeholders

The permitting/regulatory system only applies to the mining of Crown owned minerals. Anyone mining Crown owned minerals is required to obtain an appropriate permit (or licence under legislation that predates the Crown Minerals Act 1991). Mining of privately-owned minerals does not require a permit or licence.

Iwi are our Treaty partners, and key stakeholders in this system include:

  • industry (including key industry bodies Straterra and PEPANZ)
  • land owners who provide access for mining activities, and
  • NGOs or other parties with an interest in mining and its associated effects.

Processes for engagement with regulated parties and stakeholders

There are specific iwi consultation requirements in the CMA. In addition, the Crown has entered into a number of engagement protocols with iwi for policy development around petroleum and minerals.

MBIE regularly meets with permit holders, and engages with stakeholders through a variety of channels. MBIE also makes itself available to speak to any interested party, and participates in the ‘one window’(external link) initiative on the West Coast to make it easy for stakeholders to meet face to face.

In addition, MBIE has launched a quarterly regulatory newsletter that is sent to all active permit holders, applicants for permits, active permit administrators, royalty administrators, geotechnical contacts and fee administrators.

The purpose of the newsletter is to communicate regulatory information and let permit holders know about MBIE’s regulatory priorities and work programmes.

System’s fitness for purpose

Effectiveness

System performing well against criteria

Overall, the system is delivering on its intended outcomes, although there is some room for improvement in relation to gathering knowledge on system performance.

Recently, performance indicators have been put in place to monitor processing time of minerals permits, for which there is a historical backlog.

We are currently undertaking a Regulatory System Assessment of petroleum and minerals, which will provide more information on the performance of the system. The assessment includes consultation with a wide range of stakeholders.

Efficiency

System performing well against criteria

In general, regulators and parties regulated find the petroleum and minerals system relatively easy to use and comply with. The system provides predictability to parties. Difficulties and uncertainties often arise in relation to land access and consenting approvals, which fall outside our regulatory responsibilities. We work closely with other agencies to facilitate these processes and minimise costs for users as far as possible.

Resilience

System has significant issues against criteria

The basic resilience challenge for this system comes from the pronounced business cycles for petroleum and minerals. Our regulatory system assessment is considering whether there are changes to the system which will improve its resilience in the face of intense commodity cycles.

Fairness and accountability

System performing well against criteria

The system delivers fair, transparent and impartial decision-making. Information about the system is available mainly through the New Zealand Petroleum and Minerals (NZP&M) website. This includes guidance and detailed information about the permitting process and other regulatory requirements permit applicants may need to go through. We engage with stakeholders on a regular basis, which helps identify how well the system is performing.

We also publish quarterly minerals approval performance reports, which provide transparency on permitting process time frames.

Planned regulatory changes

The timeframes for improvements noted in this section are indicative and may change. We will review this information at least quarterly and update timeframes as required.

Matter name Policy intent Planned consultation Status

Hauraki Collective Treaty Settlement Bill (led by Te Arawhiti – Treaty Settlements Rōpū)

Matter type: Bill

Treaty settlement legislation providing for mineral redress-related aspects of settlement for the Hauraki Collective (comprising 12 Hauraki iwi). Consequential amendments to the Crown Minerals Act 1991 will result.

Negotiations underway

Negotiations for settlement continue.

Crown Minerals Act review

Matter type: Bill

Review of the Act to ensure it remains future-proofed and fit for purpose

Discussion document to be released in the second half of 2019.

Scoping of review underway to identify issues with the Act and options to address them.

Developing material for inclusion in the discussion document.

Planned service and operational changes

There have been significant changes across MBIE’s Energy and Resource Markets branch in 2018/19 as the branch grows its regulatory capability. A Regulatory Operating Model has been developed, which sets the following vision:

A mineral and petroleum industry that responsibly delivers value to New Zealand.

This vision is underpinned by our core principles:

  • transparent and consistent
  • targeted
  • fair, reasonable and proportionate
  • collaborative and responsive.

The operating model uses the VADE model to facilitate compliance. The VADE model is commonly used by regulatory agencies.

the vade model

MBIE is working to roll out this operating model and we have a number of work programmes underway to develop tools and information that will help to simplify the framework for permit holders, particularly minerals permit holders. This means that permit holders will more clearly understand what they can expect from the MBIE as a regulator, and what MBIE expects from them in return.