This blog has made mention before of new legislation introduced by National and impacting very negatively on mining and exploration in NZ. The legislation flies in the face of National’s claims to be business friendly.
Basically the legislation seeks to recover costs the EPA claims to incur when processing any application for exploration or mining activity in NZ. It works like this-
Say you’re an oil exploration company who want to drill an onshore well. Outside of all of the necessary regulations regarding bidding on leases etc, you must provide a “safety case” (I use the term broadly) to convince the EPA that you have every risk covered. The compliance requirements are huge, so the documents are huge.
When the EPA reviews the documents it charges a fee for its time and claimed expertise. In the case of an onshore oil well, they estimate the initial fee to be in the vicinity of $100,000. If there is any extra review, the cost rises. In most cases a company can expect one or two or three rejections and the initial $100,000 is soon just a speck in the rear view mirror.
Don’t overlook these charges are on top of what ever it might cost the applicant to compile and submit the material backing any application. These costs are frequently in the millions.
We’re not alone in the criticism we have levelled at the EPA. Its own staff echo the concerns. At a recent petroleum sector conference, Authority Chairwoman Kerry Prendergast produced a long list of things she thought had to change and the Chief Executive Rob Forlong said he felt guilty about the expensive fees charged. Forlong has since resigned.
A recent project that would have injected billions into the NZ economy has been rejected by the EPA. Two months ago, Chatham Rock Phosphate lost its bid to mine the ocean floor off the lower South Island.
CRP claims it has spent $33 million in attempting to gain clearance for the project. I admire CRP’s grit in the fight it endured to get its project cleared, and it was a bitter blow to the company when it failed. It now faces a bill for the processing of its applications under the Environmental Protection Authority’s cost recovery scheme for $605,000.
Chatham Rock said it never wrote a blank cheque to the EPA for costs, and accused the authority of what it describes as a lack of financial discipline. It said attempts to debate the bill would only incur fresh costs.
So this is the kind of impossible hurdles companies have to jump when trying to get projects started in NZ, and its a disgrace that the National Party are mostly responsible for this fiasco when they claim to be pro prosperity and anti red tape and regulation. They’re not only hypocrites, they’re collective cowards in their abject failure to talk about and react quickly to what is obviously a serious problem.
And its not what they do now but the actual outrageous atrocity that this legislation was ever passed in the first place.
NZ so badly needs these kind of innovative projects yet its almost impossible to start them up. Once more companies get to understand what is going on we can say goodbye to billions of dollars in investment.
National are useless. Mining companies spending millions on attempting to comply with the never ending requirements of detached from reality govt bureaucrats would be better off putting the money into a new political party.
We need to be rid of these National Party charlatans if this country is ever going to really prosper.
Additional material- EPA- So dysfunctional its Chief admits to feeling guilty