Most Read Contributor in New Zealand, September 2016
The High Court's
judgment in upholding the process followed by Energy and
Resources Minister Gerry Brownlee, in granting Petrobras deep water
exploration rights in the Raukumara Basin, has provided a useful
clarification of the boundaries of the Minister's
responsibilities under the Minerals Programme for Petroleum
The effect of the decision should be to increase
confidence in New Zealand's permitting regime –
especially with the imminent passage of the Exclusive Economic Zone
and Continental Shelf (Environmental Effects) Bill.
Greenpeace and East Cape iwi Te Whanau a Apanui sought a
judicial review of the Minister's decision on 1 June 2010 to
issue a permit to Petrobras granting it exploration rights over an
area in the Raukumara Basin within the exclusive economic zone
Key to their challenge was that the Minister had not complied
with the requirements of the MPP because he had failed to assess
the potential environmental effects of the activity or to take into
account New Zealand's international obligations, including
under the United Nations Convention on the Law of the Sea 1982.
The Court's findings
The Court rejected both arguments, saying that they were outside
the Minister's obligations under the Crown Minerals Act
(CMA) and the MPP.
"The Minister would have known of the possibility that
offshore oil exploration and drilling might have an impact on the
environment. He was entitled to conclude that those were not
matters for him to consider in the exercise of his mandated
function and powers. He knew they fell within the province of
others. Further, there existed a clear statutory scheme and regime,
which provided functional separation."
The Judge awarded the Minister and Petrobras costs and said
that, even had he found that "reviewable error" existed,
he would have exercised the Court's rarely used discretion to
decline relief on the basis of the 15 months' elapse of time
between when the permit was granted and when the legal challenge
No reason was offered for the delay and there had been a clear
prejudice to Petrobras which had spent up to $8 million on its
exploratory programme, which it had to complete within two
A gap in the legislative framework
Separately to the CMA, there is a raft of other legislation
dealing with environmental matters and New Zealand's
international obligations, such as the Maritime Transport Act and
Marine Protection Rules, Marine Mammals Protection Act 1978 and
Health and Safety in Employment (Petroleum Exploration and
Extraction) Regulations 1999.
But the Court (and the Crown) acknowledged there is a hole in
the law in that the Resource Management Act 1991 does not apply to
activities in the EEZ but outside New Zealand's territorial
"If questions arise as to the extent to which New
Zealand – as a State – met its international
obligations that must be a matter upon which Parliament might
choose to legislate. It is not a matter upon which the Court can
direct Parliament. Nor could it be for the Minister to "plug
any gap" because, in the end, the regulatory and statutory
functions designed to deal with risks of harm, general to the
environment, have by deliberate policy been entrusted to fall
within the ambit of powers vested in other
Gap about to be plugged
The Exclusive Economic Zone and Continental Shelf (Environmental
Effects) Bill (and associated regulations) will fill this gap by
extending a variant of the RMA to the EEZ. Chapman Tripp's
commentaries on this legislation can be accessed
The information in this article is for informative purposes
only and should not be relied on as legal advice. Please contact
Chapman Tripp for advice tailored to your situation.
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We have set out some examples of how the MERCP Act impacts resource exploration and production, and what you need to do.
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