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New Zealand: Mining in Schedule 4 Conflict: Difference between revisions
New Zealand: Mining in Schedule 4 Conflict (view source)
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Wright noted that there were legitimate arguments justifying mining (“[t]he conservation estate is a major Crown asset and the Crown is justified in seeking a return on this asset”), including the potential for a net conservation benefit derived from mineral extraction in the form of extra revenue for the Department of Conservation to improve pest control (an argument subsequently latched on to by Straterra chief executive Chris Baker – see above). However, Wright also pointed out that the campaign to remove conservation land from Schedule Four had eroded public confidence in mining on the other sixty percent of the conservation estate. | Wright noted that there were legitimate arguments justifying mining (“[t]he conservation estate is a major Crown asset and the Crown is justified in seeking a return on this asset”), including the potential for a net conservation benefit derived from mineral extraction in the form of extra revenue for the Department of Conservation to improve pest control (an argument subsequently latched on to by Straterra chief executive Chris Baker – see above). However, Wright also pointed out that the campaign to remove conservation land from Schedule Four had eroded public confidence in mining on the other sixty percent of the conservation estate. | ||
==Transparency of information and discussion process== | ==Transparency of information and discussion process== | ||
The Schedule Four - Discussion Paper stated that the Ministry of Economic Development and the Department of Conservation were “now seeking input from the community before making decisions about … policy initiatives set out in this paper. These actions aim to make the most of New Zealand’s mineral resources in an efficient and environmentally responsible way”.<ref>Ministry of Economic Development. (2010). Maximising our Mineral Potential: Stocktake of Schedule 4 of the Crown Minerals Act and beyond. Retrieved from [http://www.med.govt.nz/sectors-industries/natural-resources/pdf-docs-library/minerals/schedule-4-stocktake-discussion-paper-with-maps-.pdf]</ref> | The Schedule Four - Discussion Paper stated that the Ministry of Economic Development and the Department of Conservation were “now seeking input from the community before making decisions about … policy initiatives set out in this paper. These actions aim to make the most of New Zealand’s mineral resources in an efficient and environmentally responsible way”.<ref>Ministry of Economic Development. (2010). Maximising our Mineral Potential: Stocktake of Schedule 4 of the Crown Minerals Act and beyond. Retrieved from [http://www.med.govt.nz/sectors-industries/natural-resources/pdf-docs-library/minerals/schedule-4-stocktake-discussion-paper-with-maps-.pdf]</ref> | ||
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However, the Government still saw a silver lining to the outcome, as Energy Minister Brownlee said: “I suspect few New Zealanders knew the country had such considerable mineral potential before we undertook this process and I get a sense that New Zealanders are now much more aware of that potential and how it might contribute to economic growth.”<ref>Watkins, T. Government back-down on mining, The Press, 20 July 2010. Available from http://www.stuff.co.nz/the-press/news/south-island/3935789/Government-back-down-on-mining </ref> | However, the Government still saw a silver lining to the outcome, as Energy Minister Brownlee said: “I suspect few New Zealanders knew the country had such considerable mineral potential before we undertook this process and I get a sense that New Zealanders are now much more aware of that potential and how it might contribute to economic growth.”<ref>Watkins, T. Government back-down on mining, The Press, 20 July 2010. Available from http://www.stuff.co.nz/the-press/news/south-island/3935789/Government-back-down-on-mining </ref> | ||
== | ==Ex post facto analysis of the economic case for mining Schedule Four land== | ||
Geoff Bertram, a Senior Associate with the Institute of Policy Studies at Victoria University in Wellington, looked at the economics of the Government proposal as part of a symposium on the Schedule Four debate in August 2010 following the final Government decision on the issue. <ref name="Bertram">Bertram, G. (2011). Mining in the New Zealand Economy. Policy Quarterly, 7(1), 13-19.</ref> He wrote up his findings for publication in 2011 in which he began with a reminder of the “resource curse” concept, which holds that countries overly reliant on resource-based exports tend to grow more slowly than the average. Associated with the damage minerals booms do to growth is the tendency to unwittingly encourage “rent-seeking” whereby large mining companies fund large-scale lobbying to extract special favours from government, which in turn distorts policy regimes to the detriment of the rest of the economy. Although mining in New Zealand has not been large enough to make the resource curse a destabilising factor in macroeconomic issues, there are nevertheless issues of “diffuse negative spillovers from mining…such as damage to the national branding of pastoral and tourism exports, loss of the existence and option values of natural landscapes and ecosystems, and the potential for regulatory capture by large mining interests”. | |||
According to | |||
New Zealand had faced such distortions under the 1975-1984 National Government when it embarked on a series of large resource-based projects under its much derided “Think Big” programme, e.g. exploitation of the huge Maui gas field in the Tasman sea off the coast of Taranaki as a way of countering the oil shocks of the 1970s. Later governments sought to remedy the negative impact Think Big had on the regulatory system by recalibrating planning and environmental law via a new Conservation Act in 1987 and the Resource Management Act in 1991 (see above). The anomaly represented by mining activities, which the Minister of Conservation had no power over, was remedied by amendment of the Crown Minerals Act 1997 with the creation of Schedule Four “as a device to reduce regulatory uncertainty” by “removing the highest-value categories of [conservation] land from consideration for mining”. The credibility of such protection, however, is seriously undermined when industry lobby groups, or those who believe they would be doing these groups a service, pinpoint an opportunity to circumvent or nullify these types of rules. This was indeed the case with Schedule Four because it gives the ministers responsible the option of removing protected areas from the schedule by means of a simple Order in Council “following a consultation process that might easily be reduced to tokenism”. According to Bertram, the furore triggered over the status of conservation land protected by Schedule Four in 2010 showed that removal from such protection should be decided by a parliamentary vote and the Crown Minerals Act should accordingly be amended. | |||
Turning to the actual value of Schedule Four minerals, Bertram used as a starting point the only dollar figure the Government provided in its discussion document: NZ$194 billion. However, this was merely an estimate of the gross revenue from the extraction of all “on-shore minerals, excluding hydro-carbons”. Using 2002 and 2003 Statistics New Zealand estimates of the rental value of the country’s mineral estate, i.e. after subtracting all relevant costs (exploration, development, transportation, etc) to establish the net income that total mineral resources could yield, Bertram found that the lump-sum valuation of the entire mineral estate was less than NZ$2 billion, or less than 1% of the Government’s gross sales revenue figure. As the Government’s 2010 stocktake included only 10% of New Zealand’s total mineral reserves, they would equate to less than $200 million or not even $70 for each of New Zealand’s 2.8 million voters. Even if all Schedule Four land were opened up for mining, which would be roughly equal to 40% of the mineral estate, the country could expect to make only $400 million, or $143 per voter. | |||
Coming to the issue of specific spillovers or externalities stemming from mining protected land, Bertram referred to two earlier studies which showed that a major negative shock to New Zealand’s “brand” as a ‘clean and green’ and ‘100% pure’ nation in terms of real or perceived environmental damage could have a big economic impact by substantially reducing overseas tourism. The potential negative impact on GDP from a loss of image could be as much as 1-2%. | |||
==Prospects for expanded mining in future== | |||
Despite the Government’s climb down over its mining plans, it had not lost its appetite for expanded mineral extraction. According to Brownlee, the advantage of the discussion process was that it identified where the mining industry could and could not go. “As many people have pointed out, around 85 percent of the country is not protected by Schedule Four and a great deal of that land has mineral potential”.<ref>Quoted by Watkins, T., Government back-down on mining. The Press. Retrieved from [http://www.stuff.co.nz/the-press/news/south-island/3935789/Government-back-down-on-mining]</ref> | |||
"New Zealanders have given the miners sector [sic] a clear mandate to go and explore that land and, where appropriate, within the constraints of the resource consent process, utilise its mineral resources for everyone's benefit," Brownlee said. | "New Zealanders have given the miners sector [sic] a clear mandate to go and explore that land and, where appropriate, within the constraints of the resource consent process, utilise its mineral resources for everyone's benefit," Brownlee said. | ||
The Government would conduct a significant aeromagnetic survey of non-Schedule | |||
The Government would conduct a significant aeromagnetic survey of non-Schedule Four land in Northland and on the West Coast of the South Island to learn more about which areas have the highest concentrations of valuable minerals. | |||
This New Zealand case study provides an example of issues that are writ large on a global scale: how to sustainably benefit economically from the exploitation of non-renewable natural resources, at what cost to the natural environment should mineral extraction take place, | |||
Issues from a global perspective | |||
* | This New Zealand case study provides an example of issues that are writ large on a global scale: how to sustainably benefit economically from the exploitation of non-renewable natural resources?, at what cost to the natural environment should mineral extraction take place?, how should civil society and all relevant stakeholders be engaged in a discussion over the efficacy of mining?, and what is the best and most effective regulatory framework that avoids the potential danger of the “resource curse”? | ||
* | |||
* | What were “success” factors that led to the rejection of the purely economically justified political strategy under specific New Zealand conditions? These factors included the following: | ||
* Was the final result based on radical ideology? | |||
** In this case, rather than generating an insoluble conflict, a | * Accountability: the importance of a rigorous assessment of the country’s economic potential (from a mineral resource point of view), called a ‘stocktake’ on the one hand – or in this particular case the recognition that such assessment was lacking in rigour - and a thorough examination of public views on the other. Ultimately, Government representatives proved accountable to the general public and conceded that its argument had been weak and therefore had not convinced the voters to back it | ||
* | * Transparency: the importance of a democratic consultation process – “hard data” from the stocktake (mostly relating to the economic value of minerals) were supplemented by “soft data” on the intrinsic value of culture and the environment (conservation), and contribution to the New Zealand economy of its ‘100% pure’ brand image with the benefits that accrue from tourism and recreation, and which finally appeared from the point of view of local communities to be more beneficial. | ||
* | * Openness: the importance of having a dialogue with a wide range of industry groups, individuals, civic associations and NGOs in the country, which resulted in a diversity of viewpoints on the issue. The communication process is of particular interest in this case study and could be analysed further from the perspective of applying it to less or newly democratic societies. | ||
* Intrinsic value: Even though New Zealanders overwhelmingly voted into power a conservative government in 2008 which promised to focus on the country’s economic needs, the anti-mining debate was nevertheless driven by a strong sense of the intrinsic value of the country’s conservation estate and an inherent understanding that whatever financial benefit could be literally extracted from protected land could not possibly outweigh the benefit of leaving that land intact. | |||
Was the final result based on radical ideology? What were the general benefits of the consultation process? | |||
* Although the pro-mining lobby accused the anti-mining camp of being overly emotional over the issue, it was clear that a wide spectrum of the New Zealand public was against the Government’s proposal, including NGOs, both government and opposition politicians, professional commentators, and academics etc. These groups were simply following a long New Zealand tradition that placed higher value on an unspoiled natural environment than short-term financial gain. As Bertram noted, “the existence values of landscapes and ecosystems…are no less real than commercial values, and it is not helpful to dismiss them as ‘emotion’, since human welfare is ultimately experienced as happiness by individuals and it is this that economics seeks to maximise”.<ref name="Bertram" /> | |||
* Although protests of the size and scale of the anti-mining demonstrations are relatively rare in New Zealand, the opposition provoked by the Government mining proposal fits in with a wider global reaction against the perceived interests of the wealthy “elite”. According to O’Brien, the protest, especially among the grassroots, “may represent a reaction to the prioritization of economic development over environmental protection undertaken by the right of centre National led government”.<ref> O'Brien, T. (2012). Environmental protest in New Zealand (1997–2010). The British Journal of Sociology, 63(4), p.649.</ref> | |||
* The protests should not be construed as “radical”, however, as past support for environmental issues among the general public in New Zealand has been tempered by the understanding that economic performance should be maintained. This is true of the mining issue in New Zealand where the public is generally comfortable with coal mining and quarrying for aggregates for the construction and roading industries. <ref name="Bertram" /> | |||
* In this case, rather than generating an insoluble conflict, a better understanding of the country’s mineral estate and its potential worth to the New Zealand economy was created: including the value of environmental “services” (sometimes subjectively perceived). | |||
* Gaps in knowledge and information were highlighted, sometimes to the embarrassment of the Government, which were quickly filled by a range of expert commentators. | |||
* | * Light was cast upon the way government decision-making procedures work, with the result that proposals for greater legislative clarity were put forward that would provide more regulatory certainty and transparency in future. | ||
* | * Considerations regarding the improvement of technical mining procedures were started. | ||
* the | |||
Was the philosophical debate over the efficacy of mining for minerals in general resolved? | |||
* Mining the conservation estate in New Zealand was emphatically rejected on both environmental and economic grounds, i.e. the damage to New Zealand’s image would have serious ramifications for one of its main income earners – tourism | |||
* The economic argument for mining more non-scheduled areas became more readily accepted | |||
* There was growing awareness of the moral gap between rejection of mining in New Zealand and acceptance of products derived from mining in other countries | |||
* The stirrings of a debate over how to best use future potential income from mineral resource exploitation began, e.g. establishment of a special purpose Conservation Fund. | |||
==Positive outcomes to be learned from== | |||
Although the way the debate was conducted clearly exasperated parties on both sides, the whole process might be considered as positive: | |||
* it triggered a deluge of analytical commentary on the pros and cons of mining the conservation estate and contribution of the mining industry to the New Zealand economy | |||
* both sides probably felt they had been given ample opportunity to voice their arguments, even though the Government may have regretted the way it handled its communication campaign (which may have been the result of relative inexperience after having only recently won an election for the first time in nine years) | |||
* although shortcomings in the regulatory process were highlighted, a comparatively large number of New Zealanders felt confident enough about influencing the outcome to participate in the public consultation process. Democratic dialogue was respected. | |||
* the debate promoted a thorough and thoughtful discussion of conservation values, and went some way toward demarcating the distance to which New Zealanders are prepared to go to encourage economic growth at the expense of the environment | |||
==Conclusion== | |||
The heated debate in New Zealand over the benefits of mining for minerals on the conservation estate was a symptom of wider global economic forces that place an especial emphasis on economic growth at almost any cost. While there is a very legitimate debate to be had over the intrinsic and economic value New Zealanders place on their landscape and environmental heritage and what role mineral extraction should or could play in that, the arguments used by the government to justify the potential exploitation of conservation land were clearly not seen as credible by most New Zealanders. The government may not have abandoned ideas of revisiting the issue in the future, but regardless of the action it takes and the strategies it adopts, the whole debate has triggered a wider ranging philosophical and political discussion over the way the environment is perceived and whether decision-making processes relating to environmental protection reflect the high ideals and democratic traditions that New Zealanders aspire to. | |||
==Questions and proposed methods for further research== | ==Questions and proposed methods for further research== | ||
* The communication process could be investigated in more detail: what are the links between the most important factors | * The communication process could be investigated in more detail: what are the links between the most important factors involved in economic development (“economic development” should not be considered “mining” itself, but rather “technological progress” in the mining industry, the process of collation and utilisation of geological data, an appropriate breakdown of mining data at the aggregate level, and the interlinking of the mining industry with other sectors, e.g. recreation, tourism, agriculture, viniculture), and the number, diversity, and value orientation of the responses in the Summary of Submissions?<ref>MED (Ministry of Economic Development). (2010b). Maximising our Mineral Potential: Stocktake of Schedule 4 of the Crown Minerals Act and beyond. Retrieved from [http://www.med.govt.nz/sectors-industries/natural-resources/pdf-docs-library/minerals/summary-of-schedule-4-submissions-july-2010.pdf]</ref> | ||
* What are the subjective values of the environment? How could they be used as a counter-weight to | * What are the subjective values of the environment? How could they be used as a counter-weight to economic values? | ||
* What are the economic counter-factuals to the primary economic argument for mining? What is the opportunity cost? | * What are the economic counter-factuals to the primary economic argument for mining? What is the opportunity cost? | ||
* Institutional procedures and official decision-making processes (going on in the ministries and other institutions concerned) versus the democratic process (on the part of civic society) - what were the differences? Were there any correlations? | * Institutional procedures and official decision-making processes (going on in the ministries and other institutions concerned) versus the democratic process (on the part of civic society) - what were the differences? Were there any correlations? | ||
* | * Does New Zealand have an advantage or disadvantage in comparison to other democratic societies in these types of public participatory consultation processes because of its small size? Is New Zealand unique in its desire to protect its landscape at the cost of potentially enhanced economic benefit from exploitation of such natural resources? | ||
* Did the proposed removal of Schedule Four status from some lands represent “a significant challenge to the prevailing conservation paradigm” in the face of wider global challenges to protected areas from increasing “global commodity demands and local land pressures”? Is this the thin end of the wedge in terms of moving away from protected conservation status?<ref>Mascia, M. B., & Pailler, S. (2011). Protected area downgrading, downsizing, and degazettement (PADDD) and its conservation implications. Conservation Letters, 4(1), 9-20.</ref> | |||
==References== | ==References== | ||
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*Rudzitis, G., & Bird, K. (2011). The Myth and Reality of Sustainable New Zealand: Mining in a Pristine Land. Environment: Science and Policy for Sustainable Development, 53(6), 16-28. | *Rudzitis, G., & Bird, K. (2011). The Myth and Reality of Sustainable New Zealand: Mining in a Pristine Land. Environment: Science and Policy for Sustainable Development, 53(6), 16-28. | ||
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