New Zealand's legislation on oil security
This report is part of Oil Security Toolkit
Introduction
The 1976 International Energy Agreement Act (IEAA) and the 1981 Petroleum Demand Restraint Act provide the legislative frame for New Zealand’s oil emergency measures. The 1991 Crown Minerals Act (CMA) and the 2002 Civil Defence Emergency Management Act (CDE) also contain provisions which may be of relevance at times of an energy emergency.
Circumstances triggering operation of the emergency response system
According to article 3(1) IEAA, an oil emergency exists when New Zealand’s International Energy Agency (IEA) obligations require the taking of emergency measures. The demand restraint measures of the Petroleum Demand Restraint Act may in turn be utilised if the Governor-General determines that supplies of petroleum products are likely to be insufficient to maintain a desirable level of stocks (article 5(1)(a) Petroleum Demand Restraint Act).
Authority determining whether emergency exists
The determination whether or not New Zealand’s IEA obligations require the taking of emergency measures is made by the Governor-General (article 3(1) IEAA).
Legal stockholding obligations
Storage Agency
New Zealand does not have a stockholding agency. According to article 6(1) IEAA, the authorised Minister may direct persons who in the course of an undertaking produce, acquire, distribute, supply or use petroleum to assist with the maintenance of New Zealand’s oil reserves if such a direction appears to be necessary to the Minister in order for New Zealand to comply with its IEA obligations.
Storage Quantity
New Zealand’s primary legislation does not specify a particular volume of stocks that commercial actors should hold.
Availability of stocks
New Zealand’s primary legislation does not specify particular requirements concerning the availability of emergency stocks.
Storage Locations
New Zealand’s primary legislation does not specify particular storage modalities or locations.
Mechanisms to address emergency
General
At times of an oil emergency, the Governor-General may make regulations controlling or prohibiting the production, acquisition, distribution, supply or use of petroleum or petroleum products (article 4(1) IEAA).
Stockdraw
Sale/Tender
Pursuant to article 4(2)(a-b) IEAA, the authorised Minister may give directions to persons producing petroleum concerning the disposal and distribution of such stocks (cf. article 4(3)(b) IEAA).
Production Surge
According to article 45(1) CMA, the authorised Minister may direct the refinement, processing or production of petroleum or petroleum products.
Demand restraint
Article 4(1)(c) IEAA authorises the Governor-General to make regulations to restrain demand for, or to reduce the consumption of, petroleum or petroleum products (cf. 4(3)(a) IEAA). Specifically, article 4 of the Petroleum Demand Restraint Act stipulates that the Governor-General may inter alia regulate the use of vehicles, prescribe a scheme for rationing petroleum products and may provide for the setting aside of reserve supplies.
Further, according to article 45(2) CMA, the authorised Minister may prohibit the export from New Zealand of petroleum products previously directed to be refined or processed. Article 85(1)(e) CDE also empowers authorised persons inter alia to take measures conserving essential supplies of fuel.
Fuel Switching
N/A
Monitoring and enforcement of emergency regime
New Zealand’s emergency regime is monitored and enforced on the domestic and international level. Each will be considered in turn.
Domestic
Reporting duties
The authorised Minister may order persons producing, acquiring, distributing or supplying petroleum or petroleum products to keep such books, accounts, records and to furnish such information as the Minister deems necessary in order to enable New Zealand to comply with its IEA reporting obligations (article 7(1-2) IEAA; cf. article 13 Petroleum Demand Restraint Act).
Enforcement
Persons failing to comply with a ministerial direction (article 6(1-2) IEAA) to maintain or to build up an emergency oil reserve may be liable to pay a fine of up to 10 000 NZD (article 6(6) IEAA). Persons violating ministerial directions to supply information may be liable to pay a fine not exceeding 2000 NZD (article 7(3-4) IEAA; cf. article 21 Petroleum Demand Restraint Act). Further, authorised persons may enter premises, vehicles or vessels for the purposes of monitoring and checking a given person’s compliance with any applicable ministerial direction (article 9 IEAA; article 17 Petroleum Demand Restraint Act).
International
The IEA
As a Member of the IEA, New Zealand is obliged, pursuant to article 2 of the International Energy Programme (IEP), to maintain oil reserves equal to 90 days of net imports of the previous year. IEA Members are obliged to submit information concerning their emergency measures to the IEA secretariat (article 32 IEP) on a continuous basis and the IEA monitors Member countries’ compliance with the IEP.