Environmental Management of Oil and Gas Activities in the Exclusive ...

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Environmental Management of Oil and Gas Activities in the Exclusive Economic Zone and Continental Shelf of New Zealand Kenneth Palmer* This article considers the past and pending legal position in New Zealand regarding regulation of deep-sea exploration and mining. The obligations under international law contained in the United Nations Convention on the Law of the Sea (UNCLOS) 1982 are first outlined. The recognition of these obligations under New Zealand law is considered, with reference to the Petrobras case challenging the grant of an exploration permit in waters of the exclusive economic zone. The deficiencies in the law are being addressed under the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012 (NZ). The Environmental Protection Authority will become the primary decision-maker in granting marine consents, in place of the Minister of Energy. The scope of the regulatory powers is outlined. Comparative reference is made to procedures of the International Seabed Authority. Over the past two decades, successive New Zealand governments and environmental groups have been debating the inadequacy of legislative policy and regulatory powers in respect of exploration and mining within the exclusive economic zone and the continental shelf of New Zealand. In 2000, to address the concerns, the government initiated discussions on *

Kenneth Palmer, Associate Professor of Law, The University of Auckland, Auckland, New Zealand. The author can be reached by email at [email protected]. The article is a revised version of a paper presented at the Society of Legal Scholars Conference in Bristol, UK, in September 2012.

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Journal of Energy & Natural Resources Law Vol 31 No 2 2013

an Oceans Policy.1 Subsequent events such as the BP oil platform failure and oil spillage in the Deepwater Horizon field in the Gulf of Mexico in 2010 have provided a graphic illustration of the risks of environmental damage that may occur following an accident or defect in offshore installations. 2 Furthermore, the grounding of the motor vessel Rena off the north-eastern coast of New Zealand in July 2011, resulting in a substantial spillage of bunker oil with damage to surrounding ecology and beaches, has reinforced the concern over the adequacy of regulatory provisions covering oil and gas extraction and carriage.3 The pressures and demands internationally for exploration, discovery and utilisation of mineral resources in the ocean are increasing, placing an imperative on the need for sustainable legislative control and decision-making. The article first sets out the position internationally relating to exploration and mining within ocean areas. The regulatory system in New Zealand is described, together with a recent case involving a challenge to a consent 1

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See Ministry for the Environment, Offshore Options: Managing Environmental Effects in New Zealand’s Exclusive Economic Zone (Wellington: MfE 2005) (includes comparative information on environmental management of oceans by Australia, the United States and the United Kingdom); Ministry for the Environment, Improving Regulation of Environmental Effects in New Zealand’s Exclusive Economic Zone (Wellington: MfE 2007) (discussion paper on policy options), see www.mfe.govt.nz. See also Raewyn Peart, Looking Out to Sea: New Zealand as a Model for Oceans Governance (Auckland: Environmental Defence Society 2005). This publication refers to the Oceans Policy Initiative 2000 by the government following a report by the Parliamentary Commissioner for the Environment, Setting Course for a Sustainable Future: the Management of New Zealand’s Marine Environment (Wellington: PCE 1999). The Environmental Defence Society (EDS) text advances the need for New Zealand to develop a world-leading oceans policy. The work includes an analysis of oceans policy in Australia, Canada and the US. See, further, Kate Mulcahy, Raewyn Peart and Abbie Bull, Safeguarding our Oceans: Strengthening Marine Protection in New Zealand (Auckland: EDS 2012), 69–70 (oil exploration and mining demand). For publication details, see www.eds.org.nz. The Deepwater Horizon oil spill (BP oil) occurred in the Gulf of Mexico following equipment failure on 20 April 2010, and continued for over three months. An estimated 53,000 barrels per day (8,400 m3/d) escaped from the well before it was capped. See David Uhlmann, ‘After the Spill is Gone: The Gulf of Mexico, Environmental Crime, and the Criminal Law’ (2011) 109 Michigan Law Review 1413; John Griggs, ‘BP Oil Gulf of Mexico Oil Spill’ (2011) 32 Energy Law Journal 57; Oliver Houck ,‘Worst Case and the Deepwater Horizon Blowout: There Ought To Be a Law’ (2010) 24 Tulane Law Journal 1; Barry Barton, ‘Offshore Petroleum and Minerals’ (2011) New Zealand Law Journal 211. See Vernon Rive, ‘All at Sea: Some Initial Reflections on the MV Rena Spill’ (2011) 9 BRMB 75. The master and navigator of the vessel have been prosecuted for gross negligence and have been convicted. See also Ulrich Beyerlin and Thilo Marauhn, International Environmental Law (Oxford: Hart 2011), 126 (other major oil spills including Torrey Canyon 1967, Amoco Cadiz 1978 and Exxon Valdez 1989).

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granted to Petrobras to carry out deep-sea exploration.4 The article describes the evolution of the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012, introduced into the New Zealand Parliament as a Bill in 2011. The regulatory system and guidelines for decision-making are assessed. A conclusion is drawn as to the merits and consistency with international law of the provisions.

Exploration and mining in international waters The main starting point in international law for recognition of effective management of the oceans is the United Nations Convention on the Law of the Sea (UNCLOS) 1982.5 As pointed out by Yankov, the 1982 Convention has been supplemented and supported by the United Nations Conference on Environment and Development, June 1992, under the Rio Declaration.6 Principle 15 of the Declaration states: ‘In order to protect the environment, the precautionary approach shall be widely applied by States according to their capacities.’ The adoption of Agenda 21, at the same time, includes Chapter 17 on the Protection, Rational Use, and Development of the Living Resources in Marine and Coastal Areas. This programme of action carries with it a strong political obligation to ensure its full implementation.7 The preamble to UNCLOS states ‘That the problems of ocean space are closely interrelated and need to be considered as a whole’, and the 320 articles set out a matrix for essential regulation and management of the ocean space. In brief, UNCLOS first affirms the existence of the territorial sea around states, which may not exceed 12 nautical miles, measured from baselines determined in accordance with the Convention.8 A state will have exclusive jurisdiction over this area, subject to certain rights of innocent passage.9 Secondly, a contiguous zone may be claimed, which may extend a further 12 nautical miles, constituting an overall 24 nautical miles from the 4 5

Greenpeace of New Zealand Inc v Minister of Energy and Resources [2012] NZHC 1422. United Nations Convention on the Law of the Sea (UNCLOS) (opened for signature on 10 December 1982, in force as of 16 November 1994). See Ulrich Beyerlin and Thilo Marauhn, International Environmental Law (Hart 2011), 118; and Joseph DiMento and Alexis Hickman, Environmental Governance of the Great Seas (Oxford: Edward Elgar 2012), 14–18. 6 See Alexander Yankov, Ch 12 ‘The Law of the Sea Convention and Agenda 21: Marine Environmental Implications’ in Alan Boyle and David Freestone, International Law and Sustainable Development (Oxford: Oxford University Press 1999), 271. 7 Yankov, ibid. 8 UNCLOS, Pt II, ‘Territorial Sea and Contiguous Zone’, Art 3. See Michaela Stirling, ‘New Zealand’s Offshore Mining Regime – Rights and Responsibilities Beyond the 12Mile Limit’ (2002) 6 NZJEL 139, 143. 9 UNCLOS, ibid Arts 17–19 (innocent passage).

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shore baselines. Within this area, customs, immigration and sanitary laws may be administered.10 Part V of the Convention recognises the right to claim an exclusive economic zone that confers ‘sovereign rights for the purpose of exploring and exploiting, conserving and managing the natural resources, whether living or non-living, of the waters super-adjacent to the seabed and of the seabed and subsoil’.11 The exclusive economic zone (EEZ) may extend up to 200 nautical miles from the baseline from which the breadth of the territorial sea is measured. All states are entitled to the freedom, subject to conditions, of navigation within the EEZ, and the laying of submarine cables and pipelines for lawful uses.12 Part VI (‘Continental Shelf ’) recognises the rights over the continental shelf of a coastal state, and determines the measurement of the continental shelf where exceeding the 200 nautical miles included in the EEZ.13 Again, the Convention provides that the coastal state may exercise ‘over the continental shelf sovereign rights for the purpose of exploring it and exploiting its natural resources’. The rights are exclusive and do not depend on occupation or any express proclamation.14 The coastal state has exclusive rights to authorise and regulate drilling on the shelf for all purposes, but may be subject to payment to the International Seabed Authority (ISA) in respect of mineral resource production on the shelf beyond the 200-nautical-mile boundary.15 Part VII governs the high seas, which relate to parts of the sea not included in the EEZ, the territorial sea or internal waters. The freedoms of use of the high seas are stipulated, including navigation, overflight, cabling and pipelines, artificial islands and installations, fishing and scientific research.16 Various duties are applied to the flag state of a ship on the high seas. Particular obligations apply to piracy and hot pursuit. The right of hot pursuit applies to violations within the territorial sea, the EEZ and on the continental shelf, and may extend beyond those boundaries.17

10 UNCLOS, ibid Art 33. 11 Ibid Art 56. 12 Ibid Arts 57, 58. 13 Ibid Art 76. 14 Ibid Art 77. See Stirling, n 8 above, 147. 15 Ibid Arts 81, 82. Continental Shelf Act 1964 (NZ), s 5A (payments condition). The payments commence after the first five years of production, and commence at one per cent of the value increasing annually by one per cent to seven per cent maximum. The payments are distributed by the International Seabed Authority to state parties on equitable-sharing criteria applying certain guidelines. 16 Ibid Arts 86–93. 17 Ibid Arts 94–111.


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Part XI of the Convention deals with activities, including minerals prospecting, exploration and exploitation, within the ‘Area’, meaning the seabed and ocean floor and subsoil beyond the limits of national jurisdiction. Applicants for these activities, in respect of the 164 Member States, are subject to a detailed environmental assessment process, and approval from the ISA.18 The Convention states: ‘The Area and its resources are the common heritage of mankind.’19 It further states that activities in the Area should be carried out for the benefit of mankind as a whole, and marine scientific research should be carried out exclusively for peaceful purposes.20 Equally relevant to this article, Part XII (‘Protection and Preservation of the Marine Environment’) declares first: ‘States have the obligation to protect and preserve the marine environment.’21 Secondly, it declares: ‘States have the sovereign right to exploit their natural resources pursuant to their environmental policies and in accordance with their duty to protect and preserve the marine environment.’22 The text elaborates on the ‘Measures to prevent, reduce and control pollution of the marine environment’, requiring states to take all measures consistent with the Convention to prevent or deal with pollution. Implicitly, the prevention of pollution in the first place will be an important factor of any discretion in a consenting regime. Regulations made by the ISA require a prospecting applicant to provide for the effective protection and preservation of the marine environment, and for enforcement consequences.23 These prescriptions have been advanced by bodies making submissions on the recent New Zealand legislation, in support of improvements to the regulatory regime. The protection of the marine environment under Part XII of UNCLOS has been supplemented by the various earlier 18 Ibid Arts 133–135. The US is notable as not being a member of the International Seabed Authority (ISA). The ISA was established under UNCLOS and the 1994 agreement, with headquarters in Jamaica. The ISA has issued a Mining Code comprising rules, regulations and procedures to regulate prospecting, exploration and exploitation of marine minerals. See www.isa.org.jm/en/mcode (accessed 9 January 2013). 19 Ibid Art 136. See Graham Nicholson ‘The Common Heritage of Mankind and Mining: An Analysis of the Law as to the High Seas, Outer Space, the Antarctic and World Heritage’ (2002) 6 NZJEL 177, 185. 20 Ibid Arts 140–143. See Seabed Disputes Chamber of the International Tribunal for the Law of the Sea, ‘Responsibilities and Obligations of States Sponsoring Persons and Entities with Respect to Activities in the Area’, Advisory Opinion 1 February 2011 (obligations and liability of sponsoring states), www.itlos.org/fileadmin/itlos/ documents/cases/case.../adv_op_010211.pdf. 21 Ibid Art 192. 22 Ibid Art 193. 23 Ibid Art 194. See the ISA Mining Code, ‘Regulations on Prospecting and Exploration for Polymetallic Nodules in the Area’, Pt III, s 4, reg 21(4)(b) (consideration by the Legal and Technical Commission) (www.isa.org.jm/en/mcode).

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and later conventions dealing with oil spillages, including the 1973/78 International Convention for the Prevention of Pollution from Ships (the ‘MARPOL Convention’) and the 1972/96 London Dumping Convention. The conventions are implemented within New Zealand waters under the Maritime Transport Act 1994.24

Regulation of mineral exploration and mining in New Zealand waters UNCLOS 1982 was ratified by New Zealand in 1996. Prior to the latter date, legislation was enacted that is consistent with the articles under the Convention. The Territorial Sea, Contiguous Zone, and Exclusive Economic Zone Act 1977 (NZ) first defines the territorial sea as comprising the outer limits of a line measured 12 nautical miles from the low-water mark or baselines.25 This coastal marine area and internal waters are under the control of both central and local government. Regional authorities have regulatory jurisdiction to develop and apply regional coastal plans within the territorial sea or the similar coastal marine area.26 Secondly, a contiguous zone, extending a further 12 nautical miles from the outer limit of the territorial sea zone, is confirmed.27 The Act also establishes the EEZ, providing for an area distant 200 nautical miles from the nearest point of the baselines. The EEZ is declared to be part of New Zealand fisheries waters, and subject to exclusive control as to quota management for fisheries under the relevant legislation.28 Concerning the continental shelf, this area is established under the Continental Shelf Act 1964 (NZ). Consistent with UNCLOS, all rights to be exercisable by New Zealand in respect of the continental shelf and its natural resources, for the purpose of exploring the shelf and exploiting those resources, are vested in the Crown. 29 New Zealand has the fifth-largest EEZ in the world, comprising 400 million hectares, and the continental shelf, compliant with UNCLOS, extends beyond 24 Maritime Transport Act 1994, pts 19–27. See Stirling, n 8 above, 158–170; Lahrs Suhr, ‘Environmental Protection in Deep Sea Mining: International Law and New Zealand’s Approach’ (2008) 12 NZJEL 97, 131. For MARPOL Convention texts, see www.imo.org; for London Dumping Convention texts, see www.unep.ch/regionseas/ main/legal/llondon.html. 25 Territorial Sea, Contiguous Zone, and Exclusive Economic Zone Act 1977, ss 3–6A. Straight-line baselines may apply to bays, as provided for under UNCLOS, Arts 7 and 9. 26 RMA 1991, s 30. The ‘coastal marine area’ is defined in s 2 to include the foreshore, seabed, and coastal water between the mean high water springs mark and the outer limits of the territorial sea (12 nautical miles). 27 Territorial Sea, Contiguous Zone, and Exclusive Economic Zone Act 1977, s 8A. 28 Ibid ss 9, 10. For fisheries quota regulations, see Fisheries Act 1996. See also Marine Mammals Protection Act 1978 (protected species). 29 Continental Shelf Act 1964, s 3.


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the EEZ, adding 170 million hectares. The combined area of the EEZ and continental shelf is approximately 20 times the New Zealand dry land area.30 The Continental Shelf Act applies the provisions of the Crown Minerals Act 1991 (NZ) in respect of regulating petroleum exploration and mining on the continental shelf (in addition to mining on dry land). The latter Act confirms that the Crown owns all property rights in petroleum, which is defined to include hydrocarbons and natural gas (other than coal gas).31 The Crown Minerals Act provides for the issue of minerals programmes, which are policy statements directed at applicants and the Minister of Energy, as the decision-maker, in considering applications for exploration and mining of Crown-owned minerals. The Minister of Energy may prepare one or more programmes for different minerals. The main purpose of every minerals programme is to provide for the efficient allocation of Crown minerals, and the obtaining by the Crown of a fair financial return or royalties for its minerals.32 The Crown Minerals Act is not primarily concerned with the environmental impact or regulation of the mining activity, which is subject to regulation under the Resource Management Act 1991 (RMA) on land or within the 12-nautical-mile coastal marine area. The RMA does not apply to activities beyond the 12-mile territorial sea limit.33 Regarding the possibility of control lacunae, in the EEZ area or on the continental shelf, a separate power to approve activities in that area exists under the Continental Shelf Act. The Act declares that ‘No person shall prospect or mine for, or carry out any operations for the recovery of, minerals in the seabed or subsoil of the continental shelf except in pursuance of a licence issued under this section’.34 The Minister of Energy is empowered to consider applications, and may impose such conditions as the Minister thinks fit in the circumstances, including conditions as to safety, and the payment to the Crown of a royalty for minerals recovered. The grant of the licence is declared to be ‘in the absolute discretion of the Minister’. 30 See Ministry for the Environment, Regulatory Impact Statement: Exclusive Economic Zone and Extended Continental Shelf Environmental Effects Legislation (Wellington: MfE 20 April 2011), 7. See also Ministry for the Environment, Managing Our Oceans: A Discussion Document on the Regulations Proposed under the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill (Wellington: MfE May 2012), 3. 31 Continental Shelf Act 1964, s 4 (as amended 1991). Crown Minerals Act 1991, ss 2, 10. 32 Crown Minerals Act 1991, ss 12–21. See Derek Nolan (ed), Environmental and Resource Management Law (Wellington: 4th edn, LexisNexis 2011), 7.9–7.18. 33 RMA 1991, ss 2 (definition of coastal marine area), 12 (restriction on use of coastal marine area), 15A, 15B (restrictions on dumping waste in coastal marine area), 30(1) (d) (jurisdiction of regional council), 87(c) (coastal permit consent). Resource Management (Marine Pollution) Regulations 1998 (restrictions on dumping). See Stirling, n 8 above, 165; Nolan (ed), n 32 above, 5.35–5.40. 34 Continental Shelf Act 1964, s 5(1).

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In respect of this bare discretion (dating from 1964), no specific reference is made to any environmental assessment or consideration of the broader objectives of UNCLOS. By contrast, the Legal and Technical Commission of the ISA has issued detailed guidance for applicants and contractors for the assessment of environmental impacts on exploration activities.35 Under the Continental Shelf Act, New Zealand claims the right to enforce criminal and civil law in relation to offshore installations and devices, including ships and floating platforms.36

Petrobras decision 2012 The degree of environmental guidance outlined has been the subject of a judgment of the High Court of New Zealand in Greenpeace of New Zealand Inc v Minister of Energy and Resources.37 Greenpeace and an indigenous tribal group (iwi) sought judicial review of a decision of the Minister of Energy to grant a permit under the Crown Minerals Act to Petrobras International to undertake petroleum exploration over an area of an offshore basin (Raukumara Basin) within the EEZ. The grounds for the judicial review were that the Minister had failed to take into account environmental matters concerning protection of the seabed and ecology, and had failed to consult adequately with the local indigenous people prior to issuing the concession right. The judgment refers to the Minerals Programme for Petroleum (2005) issued by the Ministry of Energy giving guidance as to policy applying to mineral prospecting and mining. The policy identifies the strategic importance to New Zealand of access to supplies of petroleum, and to promotion of the responsible discovery and development of petroleum resources that could contribute substantially to the economy.38 It states that ‘A proactive objective for indigenous petroleum is not inconsistent with the government’s desire to reduce greenhouse gases’.39 35 Ibid s 5(4). See Stirling, n 8 above, 170–176. Since 1974 the government has informally required an assessment of environmental effects for major government expenditure, but not for private investment. Compare ISA Legal and Technical Commission, ‘Recommendations for the Guidance of Contractors for the Assessment of the Possible Environmental Impacts Arising from Exploration for Polymetallic Nodules in the Area’ ISBA/16/LTC/7 (provisionally adopted in 2010). 36 Ibid s 7. Interference with exploration activities could support a prosecution or trespass notice. 37 Greenpeace of New Zealand Inc v Minister of Energy and Resources [2012] NZHC 1422 (22 June 2012, Gendall J): www.courtsofnz.govt.nz/cases/greenpeace-of-new-zealandincorporated-v-the-minister-of-energy-and-resources. (An appeal to the Court of Appeal has been lodged against the decision. However, in late 2012, Petrobras announced that it was discontinuing its exploration work and surrendering its licence due to unfavourable prospecting results.) 38 Ibid [8]–[14]. 39 Ibid [12], referring to the Minerals Programme for Petroleum (2005), cls 2.4, 2.8.


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The policy further notes that regard should be had to the Treaty of Waitangi 1840. The Treaty comprises the colonisation commitment by the Crown, to have due regard to the interests of the indigenous inhabitants (Maori) and by implication (as confirmed in the New Zealand Maori Council case), to consult on substantial matters affecting indigenous interests. 40 The judge noted that the Marine Protection Rules 2010 applied to the exploration activity, and the Rules gave effect to the MARPOL Convention and the International Convention on Oil Pollution Preparedness, Response and Cooperation 1990. Under the former Rules, the applicant is required to prepare a discharge management plan, containing an extensive detailed description of the safety of equipment and management in the event of equipment failure.41 The judgment traverses the history of the application, and attempts at consultation with the indigenous group. The Court found on the facts the consultation taken to be adequate under the legal provisions.42 Concerning environmental matters, the claimants argued that under customary international law, the precautionary principle should have been applied, and the Minister of Energy should not have granted the licence without a full environmental assessment and scientific evaluation. The Court noted that under the Marine Protection Rules, the discharge management plan would be required for approval by another minister. The conclusion was reached, that the Minister of Energy under the Crown Minerals Act did not come under any duty to consider the broad environmental issues, as they would be assessed under other procedures. The application for judicial review was dismissed.43 In summary, the decision highlights an inadequacy in 2012 of the environmental assessment and consent procedures for ocean mining activities. The RMA 1991 (RMA) provided for comprehensive assessment of environmental matters regarding land-based applications and those within the 12-mile coastal marine area. By contrast, the legislative framework applying to the EEZ was less developed and conferred a broad discretion on the Minister of Energy to approve or not approve the exploration or mining activity. The decision provides support for the timely reform of the law by Parliament.44 40 Ibid [15]–[17]. See New Zealand Maori Council v Attorney-General [1987] 1 NZLR 641 (CA) (lands case defining principles of the Treaty of Waitangi and obligations on the Crown to act in good faith, and to consult on major issues affecting Maori). 41 Ibid [18]–[19]. The Marine Protection Rules are made under pt 27 of the Maritime Transport Act 1994. 42 Ibid [20]–[57], [119]–[147]. 43 Ibid [89]–[118]. See Marine Protection (Offences) Regulations 1998 (Enforcement of Rules). 44 As observed in 37 above, Petrobras subsequently withdrew from the exploration programme on economic grounds.

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EEZ reform bill 2011/12 In 2011, as part of a broad rationalisation of legislation and administrative responsibility, the government established an Environmental Protection Authority (EPA). The new authority was empowered to administer: the existing emissions trading scheme; hazardous substances and approval of new organisms; ozone layer protection; and the call-in of major consents under the RMA for adjudication before a board of inquiry or the Environment Court.45 As explained below, the EPA has since been given jurisdiction over the processing and determination of marine consents under the new EEZ and continental shelf legislation. The government, in its policy statement in 2011 on the proposed reform legislation, determined that the administration in the EEZ should be undertaken by one body, rather than expanding the jurisdiction of respective regional councils to cover activities in the oceans beyond the 12-mile territorial limit. The policy document expressed a view that owing to the substantial economic benefits of deep-sea mining, the criteria for determination should not be the same as those applicable to land-based activities (under the RMA). These grounds are consistent with an earlier policy expressed in 2007 by the former Labour government that the EEZ should be managed at the national level by central government because of the strong national and international community of interest, and that special rules should apply to the environmental assessment.46 The Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill (the ‘EEZ Bill’) was introduced into Parliament on 24 August 2011. The EEZ Bill provided for interpretation to be consistent with New Zealand’s international obligations, and for a system of regulation under three categories, namely permitted activities, discretionary activities (requiring a consent) and prohibited activities. These activities would be defined by regulations. The discretionary activities would invoke a public notification process allowing for submissions by any person, with a consent determination by the EPA. The Minister of Energy would no longer be the decision-maker. The basis for a decision would require the decision-maker to take a cautious approach 45 Environmental Protection Authority Act 2011. 46 Ministry for the Environment, ‘Regulatory Impact Statement, Exclusive Economic Zone and Extended Continental Shelf Environmental Legislation’ (Wellington: MfE 20 April 2011); New Zealand Government Cabinet paper, ‘Proposal for Exclusive Economic Zone Environmental Legislation’ (Wellington: NZ Government 4 May 2011). See also Ministry for the Environment, Improving Regulation of Environmental Effects in New Zealand’s Exclusive Economic Zone (Wellington, MfE 2007) (discussion paper on policy options at 4.19, 4.43). See www.mfe.govt.nz/publications. Compare Barry Barton, n 2 above, 211, 212 (concern that RMA not applied directly to consents in the EEZ).


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applying specified information principles.47 In coming to a decision, the EEZ Bill stated that the EPA could grant the marine consent in whole or in part ‘if the activity’s contribution to New Zealand’s economic development outweighs the activity’s adverse effects on the environment’.48 The EEZ Bill was the subject of extensive submissions to the Local Government and Environment Committee of Parliament. Strong objections were made by the Parliamentary Commissioner for the Environment (PCE), the New Zealand Law Society, the Environmental Defence Society, the Royal Forest and Bird Protection Society, Greenpeace, Maori (iwi) groups, and other environmental bodies. The PCE submission claimed that the purpose of the Bill and criteria for a consent were inconsistent with New Zealand’s obligations under UNCLOS. Other submissions raised similar concerns, and a failure to provide for effective protection of the marine environment, claiming approval was envisaged whenever the economic benefits outweighed the adverse effects on the environment.49 In reporting the EEZ Bill back to Parliament, the Committee made significant amendments to address the submissions received. The Committee was unable to agree on all changes, and various amendments were subject to dissent by the New Zealand Labour Party, the Green Party and the New Zealand First Party members. These parties declined to support the Bill even in its revised form.50 Subsequently, the government advanced further amendments under a supplementary order paper to ameliorate the remaining concerns. The Bill was revised to omit the original purpose ‘To achieve a balance between the protection of the environment and economic development… by requiring the decisionmakers to take into account a number of guidelines…’, and to substitute the purpose ‘to promote the sustainable management of the natural resources of the exclusive economic zone and the continental shelf’. The latter purpose, as defined, is consistent in part with the purpose under the RMA, which applies to management of activities on land and within the territorial sea.51 47 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill, cl 10. 48 Ibid, cl 61(2) (wording subsequently struck out). For critique, see Ceri Warnock, ‘Regulating the Environmental Impact of Oil and Gas Activities in the Exclusive Economic Zone and Extended Continental Shelf’ (2011) 9 BRMB 76. 49 The PCE submission notes that licences and permits granted in the last ten years include two petroleum mining permits, 21 petroleum exploration permits, one phosphate prospecting licence and one iron sands prospecting licence: see www. pce.parliament.govt/publications/submissions–and–advice; Environmental Defence Society website www.eds.org.nz. 50 Ibid, as reported from the Local Government and Environment Committee 15 May 2012 (commentary). 51 Ibid, (supplementary order paper No 100, 14 August 2012), replacing cl 10 (purpose). Compare RMA 1991, s 5 (purpose). The redefinition of the purpose satisfies in part the submission by the PCE, see n 49 above.

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The EEZ Bill, with amendments, included a definition of an ‘adaptive management approach’, which could allow, under a qualified consent, that the activity commence on a small scale or for a short period so that effects could be monitored. Such consent could be revoked if the effects were more than minor, or if some other approach allowed the activity to be undertaken so that effects could be assessed. This provision would facilitate a system of conditional approval.52 The EEZ Bill placed an obligation on every person carrying out an activity in the EEZ and on the continental shelf to avoid, remedy and mitigate the adverse effects on the environment, and to provide training and supervision to all employees engaged in the activities and sufficient resources to ensure compliance.53 The matter of compliance with international obligations was ultimately clarified by a section stating ‘This Act continues or enables the implementation of New Zealand’s obligations under various international conventions relating to the marine environment, including – (a) the United Nations Convention on the Law of the Sea 1982; (b) the Convention on Biological Diversity 1992’. The legal effect of this declaratory obligation may require further interpretation.54 The EEZ Bill was enacted by Parliament, and assented on 3 September 2012.

Regulations under the new EEZ Act The Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012 (the ‘EEZ Act’) comes into force on a date to be approved when the regulations are completed (or not later than 1 July 2014). The regulations are to be issued through the Ministry for the Environment, and will prescribe the nature of permitted activities, discretionary activities (which require a marine consent from the EPA) and any prohibited activities. 52 Ibid, cl 4, definition of ‘adaptive management approach’. 53 Ibid, cl 19 (Act, s 25). The Environment Court may enforce obligations. Compare: Health and Safety in Employment (Petroleum Exploration and Extraction) Regulations 1999 (duties relating to all petroleum operations including well-drilling and installations). 54 Ibid, cl 11 (Act, s 11). See comment on the earlier version of cl 11: Robert Makgill et al, ‘The Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill 2011’ (Auckland: Resource Management Journal, April 2012) (accessible at www.rmla. org.nz); Report of the New Zealand Law Society, ‘Success on Key EEZ Bill Submissions’ (see www.nzlawsociety.org.nz). The PCE submission, see n 49 above, required specific recognition of both UNCLOS and the United Nations Convention on Biodiversity. See also Seabed Disputes Chamber of the International Tribunal for the Law of the Sea, Advisory Opinion, n 20 above, paras 218–241 (duties of Member State to apply laws and regulations that cannot be less stringent than those adopted by the ISA).


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In taking a collaborative approach with stakeholders and the public, the government has issued a comprehensive consultation document.55 The consultation document includes extensive background information and questions regarding policy on issues and objectives, assessment criteria and the net impacts of proposals. The parts deal with the approach to be adopted in grouping activities for assessment; how the conditions for permitted activities should be considered; seismic surveying; submarine cabling; marine scientific research; oil and gas exploration; seabed mining; a summary of proposed permitted and discretionary activities; matters of cost recovery; and implementation of the regulations.56 The proposed permitted activities for oil and gas exploration and mining include acoustic and air gun seismic sampling and the collection of small surface samples. Discretionary activities include well-drilling, construction of platforms, underwater pipeline laying, well-capping and removal of equipment on decommissioning.57 The subpart of the discussion document on oil and gas describes the nature of the industry and practices carried out, including hydraulic fracturing or fracking, which involves the pumping of a water-sand chemical mixture into the underground rock where the oil or gas is trapped.58 The document notes: ‘At present fracking has not been undertaken in New Zealand waters. However, if it does become a viable activity in the future, applications to the EPA for marine consents to undertake oil and gas production will need to identify all actual and potential effects associated with an activity. This means that any environmental effects of hydraulic fracturing will be thoroughly considered by the EPA before operations can begin, along with any measures that will be taken to avoid, remedy or mitigate those effects. In addition, any discharge of fracking fluid into the sea from an installation is regulated under the Maritime Transport Act through the discharge management plan.’59 55 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012, ss 2 (commencement), 27–34 (regulations). See ‘Managing Our Oceans: A Discussion Document on the Regulations Proposed under the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill’ (Ministry for the Environment, May 2012), see www.mfe.govt.nz. 56 See ‘Managing Our Oceans’ document, n 55 above, pts one and two. 57 Ibid 15, table 4: summary of proposed permitted and discretionary activities. 58 Ibid subpart 11. 59 Ibid subpart 11.3, 54. The Parliamentary Commissioner for the Environment has issued an interim report on past hydraulic fracturing practices and environmental risks in NZ and overseas: PCE, ‘Evaluating the Environmental Impacts of Fracking in New Zealand’ (November 2012), see www.pce.parliament.nz. The report acknowledges the commercial benefits of fracking but cautions that the practice must be carefully managed to ensure that operational best practices are implemented and enforced through regulation.

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The report notes that health and safety regulations under other enactments will require operators to ensure that wells are cased with materials conforming to generally accepted and appropriate industry-practice standards, with sufficient casing to prevent the uncontrolled release of fluids. Existing regulations require operators to provide details of the casing programme before commencement of activities, and to be monitored by daily drilling reports.60 The EEZ Act provides that in preparing the regulations, the minister must establish a public notification process (including notice to iwi (Maori tribal) authorities, regional councils and persons with existing interests), and take into account any comments received. The minister must also consider: • cumulative effects; • the effects on the environment or existing interests of allowing an activity with or without a marine consent, including the effects that may occur in New Zealand or in the waters beyond the continental shelf; • the effects on human health that may arise from effects on the environment; • the importance of protecting the biological diversity and integrity of marine species, ecosystems and processes; • the importance of protecting rare and vulnerable ecosystems and the habitats of threatened species; • New Zealand’s international obligations; • the economic benefit to New Zealand of an activity; • the efficient use and development of natural resources; • the nature and effect of other marine management regimes; • best practice in relation to an industry or activity; • the desirability of allowing the public to be heard in relation to an activity classified as a discretionary activity; and • any other relevant matter.61 Further, in developing the regulations, information principles must be considered. The minister must make full use of the information available, base decisions on the best information and take into account any uncertainty or inadequacy in the information. If the information is uncertain or inadequate, the minister must favour caution and environmental protection. However, if favouring caution means the activity is likely to be prohibited, the minister must first consider whether providing for an adaptive management approach would allow the activity to be classified as discretionary. Under 60 Ibid. See Health and Safety in Employment (Petroleum Exploration and Extraction) Regulations 1999 (issued under the Health and Safety in Employment Act 1992); Crown Minerals (Petroleum) Regulations 2007, reg 35. See Barry Barton, n 2 above, 211, 213–214 (regulations considered inadequate to protect the environment following a well blowout). 61 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012, ss 32, 33.


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the provision, the best available information is defined to mean the best information that, in the particular circumstances, is ‘available without unreasonable cost, effort, or time’.62 Submissions on the options for the regulations have been received, and the Ministry for the Environment has published a Regulatory Impact Statement on the options, with input from the EPA. The conclusions reached are that seismic surveying, submarine cabling, marine scientific research and prospecting and exploration for seabed materials and petroleum (excluding petroleum drilling to be considered later) are likely to be minor in environmental impact. Minor activities are recommended to be permitted subject to conditions as to prior notification, preparation of an initial environmental assessment, mitigation plan, a prohibition on sale of materials removed from the seabed and notification of local indigenous people (iwi) under an engagement strategy. The higher costs of processing consents for discretionary activities are one policy factor in encouraging or deterring commercial investment in these activities.63 As a general comment, the processes and guidelines for the making of the regulations and the recommendations in the Regulatory Impact Statement appear to be transparent and ecologically balanced. The approach appears to be consistent with the thresholds for environmental impact assessment issued by the Legal and Technical Commission of the ISA.64

Marine consents process The EEZ Act provides for an applicant for a marine consent to undertake a discretionary activity to apply to the EPA. The application must include an impact assessment relating to effects on the environment, and effects on areas beyond the EEZ or continental shelf. The information in the assessment should provide such detail as corresponds to the scale and significance of the effects that the activity may have on the environment and existing interests, and provide sufficient detail to enable the EPA and persons whose interests may 62 Ibid s 34. 63 Ministry for the Environment, ‘Regulatory Impact Statement’ (Wellington: MfE 2012), [137], [138], see www.mfe.govt.nz/issues/oceans/current-work/index.html. The statement notes, at 13, that to date only 24 per cent of the seabed of the EEZ and continental shelf has been mapped, and only 15 per cent to a standard necessary to distinguish likely benthic environments, such as hydrothermal vents; little empirical evidence is therefore available to inform the proposals. 64 ISA Legal and Technical Commission, ‘Recommendations for the Guidance of Contractors for the Assessment of the Possible Environmental Impacts Arising from Exploration for Polymetallic Nodules in the Area’ ISBA/16/LTC/7 (provisionally adopted in 2010), IV, A. Activities not requiring an environmental impact assessment.

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be affected, to understand the nature and effects of the proposal.65 Further information may be required within a reasonable time, and the EPA may seek independent advice, including advice from the Maori Advisory Committee.66 Public notice must be given of an application for a marine consent. Any person may make a submission on the application.67 Subject to meetings and mediation to resolve matters, the EPA may conduct a hearing if considered necessary or desirable, or where the applicant or a submitter requests.68 The EPA must establish a procedure for a hearing that is appropriate and fair in the circumstances, and this should provide for compliance with principles of natural justice. However, the EEZ Act states that ‘No person may question a party or witness unless the EPA gives permission’.69 Accordingly, the hearing may be restricted in respect of traditional court procedures, which normally allow cross-examination. In assessing the application for a marine consent and making a decision, the EPA must consider a comprehensive (non-exclusive) list of specified matters, primarily concerning effects on the environment. No specific priority or weight is accorded to the environmental factors. The purpose of the EEZ Act ‘to promote the sustainable management of the natural resources’ is not directly linked to the considerations, but would be relevant overall in coming to a determination. The list is similar to the matters to be considered in determining the content of the regulations. These directions are definitive and may be pivotal in respect of decisions.70 Under the original EEZ Bill, a consent could be granted where the contribution of the activity to New Zealand’s economic development outweighed the adverse effects on the environment. Under the EEZ Act, the decision will be made on a more holistic and sustainable basis, and the economic benefits to New Zealand are only one of a number of factors to assess. The recognition of the importance of protecting the biological diversity and integrity of marine species, ecosystems and processes appears to be given greater prominence, but, as noted above, no priority is specified among the listed factors.71 65 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012, ss 38–40. 66 Ibid ss 41–44. The Maori Advisory Committee, established under ss 18 and 19 of the Environmental Protection Act 2011, comprises four to eight independent members of Maori heritage who have the function of advising the EPA on matters relating to policy, process and decisions. The advice should be given from a Maori perspective. The Committee fulfils expectations under the Treaty of Waitangi 1840 on the Crown towards Maori as the indigenous people. 67 Ibid ss 45–48. 68 Ibid ss 49–52. 69 Ibid s 53(4). Compare RMA 1991, s 39(2) (no right of cross-examination at hearings before local authorities). 70 Ibid ss 10, 59. See appendix below. Compare s 33 (matters to be considered for regulations). 71 Ibid ss 59, 61 (decisions on applications for marine consents). See Suhr, n 24 above, 139, 141.


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Matters to which the EPA must not have regard are trade competition or the effects of trade competition; the effects on climate change of discharging greenhouse gases into the air; or the effects on a person who has given written approval where that person’s existing interests could be affected.72 Further, the EPA is mandated to make full use of information principles, to base decisions on the best available information and to take into account any uncertainty or inadequacy in the information. Where the information is uncertain, the EPA must favour caution or the taking of an adaptive management approach. Otherwise, the EPA may grant the consent with conditions or refuse the application. A decision must be in writing and include reasons.73

Conditions of marine consents Where the EPA approves an application for a marine consent, the consent may be granted subject to any condition considered appropriate to deal with the adverse effects of the activity. The conditions may specifically include a bond for performance; public liability insurance of a stated value; monitoring of the activity; the appointment of an observer to monitor the activity; the keeping of records; and conditions that amount to or contribute to adaptive management.74 The adaptive management approach may allow for the activity to commence on a small scale or for a short period so that the effects on the environment and existing interests can be monitored. The approach may allow for staging of activities. The stages may relate to areas for the activity, the scale and intensity, and the nature of the activity.75 72 Ibid ss 59. The excluded matters are similar to considerations on applications under the RMA 1991, for approval of land-based mining activities or exploration and mining within the 12-mile coastal marine area. See Greenpeace New Zealand Inc v Genesis Power Ltd [2008] NZSC 112, [2009] 1 NZLR 730 (rationale for exclusion of climate change); Royal Forest and Bird Protection Society of New Zealand Inc v Buller Coal Ltd [2012] NZHC 2156 (consequent greenhouse gas emissions or use of coal product overseas not relevant to consent process – appeal pending to the Supreme Court of New Zealand). Greenhouse gas emissions are managed by central government under an emissions trading scheme established under the Climate Change Response Act 2002 (as amended), and subject to any national environmental standards on air or water emissions (under the RMA 1991). For standards applicable to air emissions, see Resource Management (National Environmental Standards for Air Quality) Regulations 2004. 73 Ibid ss 61, 62, 69. 74 Ibid ss 63, 64 (adaptive management), 65 (bonds), 66 (monitoring), 67 (observers). Ministry for the Environment, ‘Regulatory Impact Statement’ (Wellington: MfE 2012), [113], estimates the cost of an observer to range between NZ$500 and NZ$5,000 a day. 75 Ibid s 64.

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The consent is stated to be neither real nor personal property, but may vest in a personal representative and may be the subject of a charge. The duration of a consent will be up to 35 years. The consent may be transferred to another person but not to another location. The EPA may, under certain circumstances, review the duration and conditions in a marine consent. A consent may be reviewed where adverse effects on the environment or existing interests arise that were not anticipated when the consent was granted.76 The EPA must apply a cost recovery approach to applications, and charges may be prescribed by regulations.77

Cross-boundary applications Regarding exploration and mining applications for cross-boundary activities within the territorial sea, and extending over the EEZ or continental shelf, a combined application is envisaged. The regional council or unitary council may assess the application within the territorial sea under the RMA, and the EPA may assess the activities between the 12- and 200-mile limit in accordance with the provisions of the EEZ Act. Initially, a joint application or separate applications may be made.78 Where a nationally significant cross-boundary activity arises, provision is made for the application to be referred by the Minister for the Environment to the Environment Court or a board of inquiry. The EPA may delegate to the latter board its functions in processing the marine consent.79 In all applications, certain rights of objection on procedural decisions back to the EPA may be made. An appeal on a question of law from a decision of the EPA may be made to the High Court by an applicant or any submitter. No right of appeal exists on the merits of the decision by the EPA or law, to the Environment Court.80

76 Ibid ss 72–84. An unexercised consent may lapse after five years: ss 85–87. A consent may confer valuable property in conferring priority to use of resources: see Aoraki Water Trust v Meridian Energy Ltd [2005] 2 NZLR 268, [2005] NZRMA 251 (water rights consent for use of water for hydro-generation). 77 Ibid ss 143–146. Ministry for the Environment, ‘Regulatory Impact Statement’ (Wellington: MfE 2012), [54] estimates costs payable to the EPA for a discretionary activity marine consent to range between NZ$250,000 and NZ$7m. 78 Ibid ss 88–98. 79 Ibid ss 94, 99–100. Where the EPA delegates its functions to a board of inquiry, an Environment Judge or retired High Court judge may head the board: RMA, s 149J. 80 Ibid ss 101–104 (objection to the EPA), 105–113 (appeal to the High Court). No provision is made for a person with a greater interest than the public in general to join in the appeal. The Attorney-General may become a party where representing a relevant aspect of the public interest: s 109.


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Enforcement of marine consents An Environment Judge or the Environment Court has jurisdiction in respect of any civil ‘enforcement order’. An enforcement order may apply to a breach of the EEZ Act or the regulations or a marine consent. The court may make appropriate orders to ensure compliance or to remedy actual or likely adverse effects on the environment. The court may require a person to pay money or reimburse another person for any actual and reasonable costs or expenses that have been incurred in taking reasonable measures to avoid, remedy or mitigate adverse effects on the environment or existing interests. This power could provide for the payment of compensation for costs incurred in cleaning up any environmental damage or oil spill, where contrary to the conditions of the consent or compliance with the regulations.81 The power to issue an ‘abatement notice’ is given to EPA enforcement officers, who may require compliance with conditions of approval or the regulations regarding activities. The enforcement of an abatement notice may be subject to appeal or order of the Environment Court.82 The breach of any duty to obtain a marine consent for a discretionary activity, or contravention of a consent, or regulations regarding permitted or prohibited activities may constitute an offence. The maximum penalties for an offence committed by a natural person are a fine of NZ$300,000 or for a corporate body, a fine not exceeding NZ$10m, together with an additional maximum fine of NZ$10,000 per day for a continuing offence. Unlike offences under the RMA, there is no provision for a prison sentence.83 A principal may be strictly liable for the activities of an agent unless able to establish a no-fault type defence. Only an enforcement officer may lay an information for an offence.84 With regard to existing petroleum activities and pending applications for exploration, comprehensive transitional provisions are provided. Existing activities may generally continue for a licence period, or a limited period after the EEZ Act and regulations come into effect. Prior to the EEZ Act taking effect, an application for an exploration or mining permit should comply 81 Ibid ss 114–124. The Environment Court is constituted under the RMA 1991, ss 247, 248. Separate liability for oil spill clean-up remains under the Maritime Transport Act 1994. 82 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012, ss 125–131, 138–141 (enforcement officer appointment and powers of entry), 148, 149 (notices and service). 83 Ibid ss 132, 133. The EEZ Bill was amended by Supplementary Order Paper No 100 to increase the maximum fine for a corporate body from NZ$600,000 to NZ$10m. 84 Ibid ss 134–137. An information must be laid not later than six months after the breach becomes known or should have become known to the officer.

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with the voluntary impact assessment guidelines issued by the Ministry for the Environment and the EPA.85

Conclusion The Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012 establishes a comprehensive regulatory process for management of exploration and mining in the EEZ and continental shelf. The Act is consistent with the expectations and requirements of UNCLOS, and the subsequent policy of Agenda 21. The decision-making power is removed from the discretion of the Minister of Energy to the EPA. In reaching decisions, the EPA will be guided by a comprehensive list of environmental considerations. The precautionary approach or principle applies to applications. The PCE, the Environmental Defence Society and other submitters were opposed to the concept of balance in the original EEZ Bill between the protection of the environment and economic development, and made submissions on the Bill and to the Minister for the Environment.86 These bodies urged that the purpose should be restated to remove the reference to ‘balance between the protection of the environment and economic development’. As noted above, the government acted on the concern and adopted the main purpose ‘to promote the sustainable management of the natural resources of the exclusive economic zone and the continental shelf’. The term ‘sustainable management’ was consequentially defined to mean: ‘managing the use, development, and protection of natural resources in a way, or at a rate, that enables people to provide for their economic well-being while – (a) sustaining the potential of natural resources (excluding minerals) to meet the reasonably foreseeable needs of future generations; and (b) safeguarding the life-supporting capacity of the environment; and (c) avoiding, remedying, or mitigating any adverse effects of activities on the environment.’87 85 Ibid ss 161–167. For guidance on interim applications, see www.epa.govt.nz/EEZ/ Pages/EEZ-interim-measures.aspx. See also Ceri Warnock, n 48 above, 76, 78 (in the interim period operators are to submit an environmental impact assessment to the EPA and to comply with the US Bureau of Ocean Energy Management, Regulation, and Enforcement Drilling Safety Rule (BOEMRE)). 86 PCE submission, ‘Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill’ (Dec 2011), see www.pce.parliament.govt/publications/submissions– and–advice. Open letter to the Minister for the Environment from the Environmental Defence Society, Forest and Bird, World Wildlife Foundation New Zealand, Ecologic, dated 18 July 2012, see www.eds.org.nz. 87 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012, s 10 (as substituted by Supplementary Order Paper No 100 on 14 August 2012).


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This definition of ‘sustainable management’ could be interpreted to facilitate exploration and mining approvals, and to continue to condone a balance between economic wellbeing and protection of the environment. However, the EEZ Act is stated to continue and enable the implementation of New Zealand’s obligations under UNCLOS and the Convention on Biological Diversity. The procedural regulations on consents should recognise these expectations. Secondly, the EPA, in considering an application for a marine consent, is directed to have regard to environmental sustainability matters, including the precautionary approach and adaptive management. Although the definition of ‘sustainable management’ focuses on enabling people to provide for their economic wellbeing, this focus is qualified by the raft of specific considerations. The EPA should come to an appropriate decision, which does not unduly favour economic returns, in a situation where there may be significant adverse effects on the marine ecology or risk of harm. Overall, the guidelines in the Act are realistic and comprehensive.88 Of general consideration is the composition, and potential quality of decision-making, of the EPA. The chair of the authority is not required to be a person with a legal or scientific qualification, and the other members may not have any legal background or relevant expertise in mining. The members are all appointed by the government.89 By contrast, the Environment Court is chaired by an Environment Judge with relevant experience and tenure of office. The court does not have any jurisdiction in the granting of a marine consent, except where a cross-boundary application raises a matter of national significance and the EPA recommends a call-in. That hearing may be referred to the Environment Court or to a board of inquiry chaired by an Environment Judge or a retired High Court judge.90 A safeguard against any lack of expertise and objectivity of the EPA, or overt political influence in the decision-making process, is the right of appeal on a point of law to the High Court. Further, the ability to seek judicial review of the decision will remain. The Petrobras decision establishes that where the consenting authority (the Minister of Energy) complies with all legal obligations, both procedural and substantive, a consent is not likely to be set aside unless found to be irrational, perverse or made in bad faith, or 88 Ibid s 59 (set out in the appendix below). Compare Suhr, n 24 above, 140–144. 89 Environmental Protection Authority Act 2011, ss 7–10. The EPA comprises six to eight members, one of whom must be Maori. The EPA has certain powers to delegate functions under s 17, in particular with the consent of the Minister of Energy. For members of the EPA board, see website www.epa.govt.nz. See also Barry Barton, n 2 above, 211, 212 (EPA a Crown entity). 90 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012, ss 94, 99. Compare RMA 1991, ss 142 (matter of national significance), 149J (board of inquiry), 248–251 (Environment Judges).

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affected by substantial procedural non-compliance.91 The same principle would apply to decisions of the EPA. The democratic check and balance can be reflected in the appointment by the government of members of the EPA, and the public response to its decisions. A further comparison can be made with the decision-making process applying to the ISA. The regulations made under the ISA Mining Code provide for the enterprise to apply (including a certificate of state sponsorship) with details containing a comprehensive environmental impact assessment (where required). The application is referred to the Legal and Technical Commission to determine whether the proposed activity will ‘provide for effective human health and safety’, and ‘provide for effective protection and preservation of the marine environment’, and will not interfere with sea lanes and intense fishing activity. The Commission may recommend approval in relation to a specific area. If approved by the council, the applicant may enter a contract for exploration. The contract will require effective protection of the marine environment, and may be subject to review. On paper, this process does not appear to be any more protective of the marine environment than the proposed NZ approach. The absence of any formal provision for third-party submissions to the Commission may reduce any public opposition to the application.92 Where a marine consent is obtained, the applicant will be required to obtain consequential consents from the relevant minister under the Continental Shelf Act and the Crown Minerals Act, and comply with other statutory obligations. These consents concerning health and structure safety are likely to follow pro forma the primary decision of the EPA.93 In conclusion, the EEZ Act could provide a model for other countries on three matters of principle. First, the removal of the primary decision-making function from the Minister of Energy to the EPA is a significant concession by the government in an area subject to major economic growth and commercial pressures. 91 Greenpeace of New Zealand Inc v Minister of Energy and Resources [2012] NZHC 1422 (22 June 2012, Gendall J). An appeal to the Court of Appeal has been lodged against the decision. Following surrender of the Petrobras licence, the appeal may not proceed. 92 See ISA Mining Code Regulations and Recommendations for Guidance by the Legal and Technical Commission (November 2010), see www.isa.org.jm/en/mcode. See also Seabed Disputes Chamber of the International Tribunal for the Law of the Sea, Advisory Opinion, n 20 above, paras 99–207 (liability of sponsoring state for environmental damage limited to failure to meet due diligence obligations). 93 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012, s 26; Continental Shelf Act 1964, ss 4, 5; Crown Minerals Act 1991 (compliance with minerals programmes, and health and safety regulations); Maritime Transport Act 1994 (offshore oil and gas regulation under Marine Protection Rules); Marine Protection (Offences) Regulations 1998, r 200 applying to offshore installations. See also Barry Barton, n 2 above, 211, 213 (well design approval, use and abandonment issues).


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Secondly, the retention of submission rights for any person or interest group on an application for a marine consent is an affirmation of the role of public or third-party participation, being a role not replicated under the ISA procedures. Thirdly, the prescription of the comprehensive list of relevant considerations for decision-making may be instructive. Whether this type of list is advantageous is debateable. The list has the risk of a conflicting tick-box outcome. The ISA approach includes a single determination that an application must provide for ‘effective protection and preservation of the marine environment’.94 Under any system of regulation, the quality of the decision-makers and trust in their competence and integrity is a paramount factor.

Appendix: Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012 Section 59: Environmental Protection Authority’s consideration of application (extract) (1) This section and sections 60 and 61 apply when the Environmental Protection Authority is considering an application for a marine consent and submissions on the application. (2) The EPA must take into account – (a) any effects on the environment or existing interests of allowing the activity, including – (i) cumulative effects; and (ii) effects that may occur in New Zealand or in the waters above or beyond the continental shelf beyond the outer limits of the exclusive economic zone; and (b) the effects on the environment or existing interests of other activities undertaken in the area covered by the application or in its vicinity, including – (i) the effects of activities that are not regulated under this Act; and (ii) effects that may occur in New Zealand or in the waters above or beyond the continental shelf beyond the outer limits of the exclusive economic zone; and (c) the effects on human health that may arise from effects on the environment; and 94 See n 92 above.

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(d) the importance of protecting the biological diversity and integrity of marine species, ecosystems, and processes; and (e) the importance of protecting rare and vulnerable ecosystems and the habitats of threatened species; and (f) the economic benefit to New Zealand of allowing the application; and (g) the efficient use and development of natural resources; and (h) the nature and effect of other marine management regimes; and (i) best practice in relation to an industry or activity; and (j) the extent to which imposing conditions under section 63 might avoid, remedy, or mitigate the adverse effects of the activity; and (k) relevant regulations; and (l) any other applicable law; and (m) any other matter the EPA considers relevant and reasonably necessary to determine the application. (3) The EPA must have regard to – (a) any submissions made and evidence given in relation to the application; and (b) any advice, reports, or information it has sought and received in relation to the application; and (c) any advice received from the Māori Advisory Committee. (4) When considering an application affected by section 74 [consent renewal], the EPA must also have regard to the value of the investment in the activity of the existing consent holder.