The EEZ Bill

August 8th, 2012 at 9:00 am by David Farrar

Amy Adams announced:

Companies that do not comply with marine consent rules in the Exclusive Economic Zone could face fines of up to $10 million under proposed changes to a Bill that provides better protection for New Zealand’s marine , Minister Amy Adams has announced. …

The key changes the Government proposes to make are:

  • Amend the purpose of the Bill to incorporate the concept of sustainable management to reflect the Resource Management Act
  • Increase the maximum penalty for companies that breach marine consents from $600,000 to $10 million
  • Clarify that a transitional period for planned petroleum activities will cover the 2013/14 drilling season; and
  • Provide a maximum statutory timeframe of six months for a marine consent process.

Lifting the maximum fine would send a strong message that New Zealanders value their oceans.

“At this new level, I consider the penalty would be high enough to provide significant incentive to comply with the regime when operating in the ,” Ms Adams says.

I’m pleased with these changes. I think there is significant economic opportunity to be had from our exclusive economic zone – recall it is an economic zone. Some want to ban all economic activity in it.

$600,000 was too low for a maximum fine. The higher maximum fine will provide greater incentives for companies to minimise risks of environmental damage. That is a win-win – we get more economic activity in the zone, with  less risk.

Of course some demand no risk at all. But I think most New Zealanders like having jobs.

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5 Responses to “The EEZ Bill”

  1. David Garrett (5,120 comments) says:

    This is a very sensible move…but the maximum fine ought to be $100 million, not 10. An offshore rig may cost up to USD1 million a day to operate off the NZ coast. If the fine is “only” equivalent to ten days drilling time, there is the risk it will simply treated as a business cost.

    But even if the potential fines were at that level, it would not satisfy the hard greenies. They dont want any drilling anywhere, even if – which is of course impossible – it was entirely risk free. But for the rest of us, a sensible change.

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  2. Colville (1,771 comments) says:

    I assume if I wanted to operate a drilling rig offshore I would need to hold/have proof of a massive insurance policy against damages/costs?

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  3. Cobolt (82 comments) says:

    I agree with David, spilling some oil from a ships fuel tanks may not require a multi million dollar fine but the incentive to avoid a gulf type spill needs to be in the multi hundreds of millions if not billions.
    Perhaps the answer is to specify the maximum possible fine as part of the consenting process.

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  4. Joseph Carpenter (210 comments) says:

    Perhaps the answers to the above if it is to be aligned with the RMA:
    - Charge a fine per day of ongoing offence (in RMA $10-20,000 per diem), say up to $1million per diem and also fine per separate offence – jointing is disallowed.
    - Offences are “strict liability” and “joint and several” liability as per RMA, no viable defense and go after everyone with an interest and who can pay, in particular the owners/principals personally.
    - Use trust busting as per the RMA if they try and shelter.

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  5. David Garrett (5,120 comments) says:

    In some jurisdictions company officers (the highest in the structure they can get their hands on) are liable to imprisonment. That tends to focus the corporate mind

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