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Draft resources strategy panned as incoherent Trojan horse

Draft resources strategy panned as incoherent Trojan horse

First published in Energy and Environment on October 17, 2019.

The BusinessNZ Energy Council has told the Government its draft resources strategy is incoherent and implies a sharp narrowing of the sector and major change.

BEC’s submission on ‘Responsibly Delivering Value: A Minerals and Petroleum Resource Strategy for Aotearoa NZ: 2019 – 2029’ says a strategy is meant to “act as a touch-stone against which subsequent actions can be prioritised”.

BEC says the document left them “somewhat confused”.

“We are quite simply unsure what to make of this ‘strategy’ – both in terms of how to understand its meaning and therefore impact, and what action to recommend to our members to take as a result of it.”

The key missing question is “what is the role of natural resources in a low emissions future? And further, what is it that NZ will be selling to the rest of the world in say 2040, or beyond, that will retain and grow our economic prosperity and wellbeing? This is important as it will give context to the likelihood or not of NZ’s lithium potential ever being realised.”

The omission of an overarching economic strategy meant the strategy reads like an implicit narrowing of the sector.

“The outcomes feel pre-determined. The evident expectation or intent is for there to be less fossil fuel resource development and more climate friendly development. It would be far clearer if this is what the ‘strategy’ said. Similarly, if the Crown no longer wishes to maximise its returns, then it should simply say so.”

There was is nothing in the strategy giving any indication that the minerals necessary to build low emissions technology, such as batteries and wind turbines, will be explored for or manufactured in NZ.

The Government positioning statements in the strategy imply major institutional change ahead for the extractive and energy sectors.

“It is hard to imagine this document being taken by senior executives into their Boards with anything other than indications of growing unpredictability surrounding the regulatory framework within which they operate and heightened risk.”

If the principles laid out in the strategy were intended to be rules, then: “To be blunt, we have no idea how the 16 principles will be operationalised or importantly, how the trade-offs between them will be managed. As drafted, they could be used to ‘count-in’, or indeed ‘count-out’ anything.”

On one hand the strategy meant resource sector participants could legitimately say the vision, objectives and principles describe the sector and its actions now and that it would be judged well against it.

“But this is clearly not its intent. Rather it appears that its intent is to lift the bar for the resources sector in ways not yet revealed. We recommend that the MBIE abandon the ‘strategy’ and focus on good public policy development in the action areas, or as a second best alternative, go back to the drawing board to try to make the ‘strategy’ more coherent and useful.”

Another submission by Straterra – a miners representative group – echoes similar sentiments, but in less blunt language saying the strategy does not provide and any clarity of purpose or principles.

It also raised concerns about the references in the strategy to the proposed ban of mining on conservation land, when “further, consultation on the No New Mines has not yet occurred and will clearly not occur in the timeframe of the Resource Strategy consultation.”

First published in Energy and Environment on October 17, 2019.

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