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Offshore Renewable Energy Bill

Administration and enforcement - Enforcement - Offences

149: Offence for knowingly failing to meet decommissioning obligation or financial security obligation

You could also call this:

"Breaking the rules about cleaning up offshore energy projects can be a serious offence."

Illustration for Offshore Renewable Energy Bill

If you knowingly fail to meet your obligations to decommission offshore renewable energy infrastructure or put in place financial security, you can commit an offence. This means you must follow the rules set out in sections like section 70 and section 71 to decommission infrastructure, and section 79 to put in place financial security. You must do this as required by the relevant parts of the proposed law.

If you are a company director and your company commits an offence, you can also commit an offence. If you commit an offence, you can be liable for a fine or imprisonment. The fine can be up to $1 million for an individual, or up to $10 million for a company, or even three times the cost of decommissioning.

If you are a director, you have a defence if you can prove you took all reasonable steps to ensure the obligations were met. Proceedings for an offence can be started within three years of the matter being discovered or when it ought to have been discovered.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS992335.

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Part 4Administration and enforcement
Enforcement: Offences

149Offence for knowingly failing to meet decommissioning obligation or financial security obligation

  1. A person commits an offence if—

  2. they do any of the following:
    1. contravene, or permit a contravention of, section 70 or 71 by failing to carry out or meet the costs of (or both) the decommissioning of any ORE infrastructure as required by subpart 2 of Part 3:
      1. act, fail to act, or engage in a course of conduct that results in the person not being able to meet all or part of their decommissioning obligation by the time the person is required to do so under section 74:
        1. contravene, or permit a contravention of, section 79 by failing to put in place, or maintain (or both), an acceptable security arrangement as required by subpart 3 of Part 3; and
        2. they do so knowing that the failure, act, or course of conduct will have that result.

            1. Guidance note

            See also section 157, which provides that a person may be liable for a pecuniary penalty for contravening their decommissioning obligation or their financial security obligation.

          1. If a body corporate commits an offence under this section, a person who is a director of that body corporate at the time the offence was committed also commits the offence.

          2. A person who commits an offence under this section is liable on conviction,—

          3. if they are an individual (including an individual director), to imprisonment for a term not exceeding 2 years or to a fine not exceeding $1 million, or both; or
            1. in any other case, the greater of—
              1. a fine not exceeding $10 million; and
                1. a fine not exceeding 3 times the cost of decommissioning or, in the case of a contravention of the financial security obligation, 3 times the amount by which the contravention reduced the required amount of the security (see section 83, under which the Minister determines the amount that must be secured by a financial security arrangement).

                2. In a prosecution of a director for an offence against this section, it is a defence if the director proves that—

                3. the person liable for carrying out the decommissioning obligation or financial security obligation (person A) took all reasonable steps to ensure that person A would meet person A’s obligation; or
                  1. the director took all reasonable steps to ensure that person A would meet person A’s obligation; or
                    1. in the circumstances, the director could not reasonably have been expected to take steps to ensure that person A would meet person A’s decommissioning obligation or financial security obligation.

                      1. Proceedings under this section may be commenced within 3 years after the matter giving rise to the offence was discovered or ought reasonably to have been discovered (whichever is earlier).