Oil and Water - Can the Offshore Minerals Industry and Environmental Protection Ever Mix?

• Author: Brendan Patrick Coll Abley
• Position: BA/LLB (Hons) student, University of Auckland. I would like to thank Associate Professor Paul Myburgh for his encouragement and input into this paper
• Pages: 44-63

(2016) 30 ANZ Mar LJ

44

OIL AND WATER – CAN THE OFFSHORE MINERALS INDUSTRY AND

ENVIRONMENTAL PROTECTION EVER MIX?

Brend a n Ab ley

*

1 Introduction1

Take an emerging global energy crisis, mix it with some convenient United Nations rules that a llow a small

country to claim fifteen times its land area in ocean space, and then add a splash of cutting-edge extraction

technology. With these factors in place, New Zealand’s p otential to develop a significant offshore minerals

industry increases dramatically. All that is needed is an effective legal regime to attempt to balance the ensuing

raft of economic, environmental and social concerns that arise from mineral extraction in the exclusive economic

zone (the ‘EEZ’) and on the continental shelf.

New Zealand now largely regulates offshore mineral activities under the Exclus ive Economic Zone and

Continental Shelf (Environmen tal Effects) Act 2012 (NZ) (the ‘EEZ Act’). T his Act came into force on 28 June

20132 and has become a fast moving area of law. To date, the Environmental Protection Authority (the ‘EPA’)

has received four notified marine consent applications under the new framework.3 The EPA declined seabed

mining proposals from Trans-Tasman Resources Limited (‘TTR’) and Chatham Rock Phosphate Limited (‘CRP’)

(the ‘TTR decision’ and ‘CRP decision’).4 TTR lodged, then withdrew, an appeal to the High Court,5 while CRP

opted not to appeal at all.6

On the other hand, the EPA has approved notified applications for oil drilling activities, from OMV New Zealand

Limited (‘OMV’) and Shell Todd Oil Services Limited (‘Shell Todd’) (the ‘OMV notified decision’ and ‘Shell

Todd notified decision’).7 It also granted marine consents to those companies on a non-notified basis in late 2014

(the ‘OMV non-notified decision’ and the ‘Shell Todd non-notified decision ’).8

In this paper, I have considered the prior regime for accessing resources in the EEZ. I have attempted to analyse

the EEZ Act in the co ntext of the first marine consent decisions under the new framework. I have supplemented

this analysis with reference to the Australian regime for accessing petroleum and minerals. The EEZ Act has

provided a much-needed response to a gap in the environmental management of New Zealand’s offshore

resources. Despite this, cracks are already starting to appear in the regime. The overall regulatory structure for

offshore activities remains fragmented, with many agencies involved at different stages of the process. As a result,

New Zealand still lacks a comprehensive, integrated management regime for offshore resource developments.

Given the high levels of reward and risk associated with developing the offshore minerals industry, such a regime

is a necessary and desirable step if Ne w Zealand is to benefit from its offshore resources in a responsible and

environmentally sound way.

* BA/LLB (Hons) student, University of Auckland. I would like to thank Associate Professor Paul Myburgh for his encouragement and

input into this paper.

1 This article considered the EEZ Act as passed. The New Zealand government has proposed a number of changes to the EEZ Act under the

Resource Legislation Amendment Bill 2015. That Bill is currently before a select committee, which is due to issue its report in September

2016.

2 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act Commencement Order 2013 (NZ) cl 2.

3 I have excluded applications for marine consents under the transitional provisions of the EEZ Act. The notified application process

requires public input. Non-notified applications are not open to public submissions.

4 Environmental Protection Authority, Trans-Tasman Resources Limited Marine Consent Decision (17 June 2014) ( ‘TTR decision’);

Environmental Protection Authority, Decision on Marine Consent Application by Chatham Rock Phosphate Limited to mine phosphorite

nodules on the Chatham Rise (10 February 2015) (‘CRP decision’).

5 Environmental Protection Authority, Trans-Tasman Resources Ltd: Application for marine consent (2014)

fault.aspx>.

6 Environmental Protection Authority, Chatham Rock Phosphate Ltd: Application for marine consent (2015)

.

7 Environmental Protection Authority, Decision on Marine Consent Application OMV New Zealand Limited Development drilling at the

Maari Field at the Taranaki Bight (15 December 2014) (‘OMV notified decision’); Environmental Protection Authority, Mui Offshore

Facilities – Shell Todd Oil Services Limited Reasons for Decision on Application for Marine Consent (4 June 2015) (‘Shell Todd notified

decision’).

8 Environmental Protection Authority, OMV New Zealand Limited Whio-1 – located within the South Taranaki Bight Environmental

Protection Authority (26 August 2014) (‘OMV non-notified decision’); Environmental Protection Authority, Shell Todd Oil Services New

Zealand Limited Ruru-2 and Mui-8 – Located within the South Taranaki Bight (14 October 2014) (‘Shell Todd non-notified decision’).

(2016) 30 ANZ Mar LJ

45

2 New Zealand’s Claim to the Exclusive Economic Zone and Continental Shelf

Administratively, New Zealand’s offshore area is divided into the territorial sea, the contiguous zone, the EEZ

and the continental shelf, as detailed below:

Figure 1: New Zealand’s offshore zones9

The 1982 United Nations Convention on the Law o f the Sea (‘UNCLOS’) regulates New Zealand’s authorit y in

each of these zones. The territorial sea extends from baselines to a line 12 nautical miles away.10 This forms part

of the sovereign territory of New Zealand.11 The co ntiguous zone extends a further 12 nautical miles from the

limits of the territorial sea.12 In the contiguous zone, New Zealand can exercise the level of control necessary to

enforce customs, fiscal, immigration or sanitary laws.13

The EEZ extends from the 12 nautical mile limit of the territorial sea to a line 200 nautical miles from the territorial

sea baseline.14 At approximately four million square kilometres, New Zealand’s E EZ is one of the largest in the

world.15 In the EEZ, New Zealand has ‘sovereign rights’ to explore, exploit, conserve and manage all living and

non-living natural resources on and under the seabed and in the waters above it. 16 The use of the term ‘sovereign

rights’ over some aspects of the EEZ suggests that the State’s powers are more than jurisdictional, yet fall short

of full sovereignty.17 New Zealand then has mere ‘jurisdiction’ under the Convention with regard to offshore

installations and structures, marine scientific research and protection of the marine environment. 18

This raises an interesting point of international law about the extent to which the New Zealand Parliament can

make and enforce law to protect and preserve the marine environment – an area over which New Zealand only

has ‘jurisdiction’. Under UNCLOS Article 211(5), States can make laws and regulation s in the EEZ, p rovided

that these laws and regulations conform to accepted inter national rules and standards. 19 This provision could

validate the EEZ Act, assuming that it is actually legislation designed to protect and preserve the marine

environment. An alternative may be to justify the EEZ Act as an exercise of New Zealand’s sovereign right to

explore, exploit, conserve and manage resources in the EEZ. A more detailed analysis of this topic is beyond the

9 Land Information New Zealand, Maritime Boundary Definitions (13 October 2015)

information/maritime-boundaries/maritime-boundary-definitions>.

10 Territorial Sea, Contiguous Zone and Exclusive Economic Zone Act 1977 (NZ) s 3.

11 United Nations Convention on the Law of the Sea (UNCLOS), 1982, 1833 UNTS 3 art 2(1).

12 Territorial Sea, Contiguous Zone and Exclusive Economic Zone Act (NZ) s 8A(2).

13 UNCLOS art 33.

14 Territorial Sea, Contiguous Zone and Exclusive Economic Zone Act (NZ) s 9(1).

15 Land Information New Zealand, Map of the Continental Shelf Boundary (13 October 2015)

were-doing/projects/new-zealand-continental-shelf-project/map-continental-shelf>.

16 UNCLOS, art 56(1)(a).

17 Ivan Shearer ‘The Limits of Maritime Jurisdiction’ in Clive Schofield et al (eds) The Limits of Maritime Jurisdiction (Martinus Nijhoff,

2014) 51, 58.

18 UNCLOS art 56(1)(b).

19 See also Shearer, above n 16, 62.