Crown Minerals Amendment Act passes – what it means for the minerals industry

The majority of new requirements in the Act aim to strengthen the petroleum sector’s responsibility for decommissioning activities. However, there are also a number of changes that apply to the minerals sector, the most notable being the introduction of new enforcement tools.

Read the Minister’s press release — The Beehive website

Read the Amendment Act — Legislation New Zealand

This In Focus article describes the changes that are in force now that affect the minerals sector.

Provisions now in force that apply to the minerals industry 

New enforcement tools for the regulator

The Act gives the regulator new enforcement tools to improve compliance and enforcement under the Act, including:

Compliance notices

A compliance notice is issued by the Chief Executive of MBIE, or an enforcement officer, to a person that they believe, on reasonable grounds, is breaching one or more of the requirements of the Crown Minerals Act or its regulations. A compliance notice sets out what the breach is and a time by which the breach will need to be remedied. If the person issued with the compliance notice doesn’t comply within the set time, they could be fined on conviction of up to $200,000.

Enforceable undertakings

An enforceable undertaking is an agreement between the regulator and a non-compliant party that the regulator will not prosecute if the non-compliant party agree to certain conditions, activities, or actions. A person who contravenes an enforceable undertaking while it is in force could be fined on conviction of up to $200,000.

Infringement offences 

Infringement offences are instant fees for non-compliance with certain requirements. NZP&M as the regulator, cannot use infringement offences until regulations defining the infringement offences are passed.

These new enforcement tools can only be applied to offences that take place on, or after, the date of Royal assent – 1 December 2021.

Changes to the tests used when someone acquires a permit

The Act also amends the test used when:

• someone applies for a new permit
• someone transfers their interest in a permit
• a change of control for a Tier 1 permit operator is consented .

The Act now requires the decision-maker to be satisfied that a proposed permit holder will be highly likely to comply with work programmes, permit conditions, health and safety requirements, environmental requirements and obligations relating to fees and royalties.

This change is intended to reduce the chance of people getting a permit if they:

• don't have the right technical or financial capability, or
• have a poor history of compliance.

New offence for not providing information when requested in a written notice

The Act includes a new offence and penalty for any person that doesn’t provide information requested in a written notice by the Minister, the Chief Executive or an enforcement officer, under section 99F of the Act.

Consistent with existing penalties in the Act, a person could be fined up to $20,000, and, if the offence continues, to a further fine of up to $2,000 for every day or part day the offence continues.

Other amendments made in the Act

The Act also makes other amendments to improve its administration, including:

• clarifying the type of records and reports expected to be kept by permit and licence holders
• enabling the proactive release of reports once the relevant non-disclosure periods have passed
• removing the need for annual reassessments by NZP&M of the tier status of mineral permits
• reclassifying all minerals prospecting permits as Tier 2 permits.